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The 



NORTH CAROLINA 

REGISTER 



IN THIS ISSUE 



B 



CONa 
TITUI 

ItiomI 



IN LCCIBUS^ 
SALUS^ 



EXECUTIVE ORDER 



PROPOSED RULES 
Administration 
Commerce 

Environment, Health, and Natural Resources 
Human Resources 
Insurance 
Labor 

Professional Engineers & Land Surv^ors 
Public Education 
Transportation 



LIST OF RULES CODIFIED 



RRC OBJECTIONS 



RECEIVED! 



SEP 21 1994 

KATHT^INE R EVERETT 
LAW LIHRARY I 



CONTESTED CASE DECISIONS 



ISSUE DATE: September 15, 1994 



Volume 9 • Issue 12 • Pages 877 - 956 



INFORMATION ABOUT THE NORTH CAROLINA REGISTER AND ADMINISTRATIVE CODE 



NORTH CAROLINA REGISTER 

The North Carolina Register is published twice a month and 
contains information relating to agency, executive, legislative and 
judicial actions required by or affecting Chapter 150B of the General 
Statutes. All proposed administrative rules and notices of public 
hearings filed under G.S. 1 50B-2 1 .2 must be published in the Register. 
The Register will typically comprise approximately fifty pages per 
issue of legal text. 

State law requires that a copy of each issue be provided free of 
charge to each county in the state and to various state officials and 
institutions. 

The North Carolina Register is available by yearly subscription at 
a cost of one hundred and five dollars ($105.00) for 24 issues. 
Individual issues may be purchased for eight dollars ($8.00). 

Requests for subscription to the North Carolina Register should be 
directed to the Office of Administrative Hearings, P. O. Drawer 27447, 
Raleigh,N.C. 27611-7447. 

ADOPTION, AMENDMENT, AND REPEAL OF 
RULES 

The following is a generalized statement of the procedures to be 
followed for an agency to adopt, amend, or repeal a rule. For the 
specific statutory authority, please consult Article 2A of Chapter 150B 
of the General Statutes. 

Any agency intending to adopt, amend, or repeal a rule must first 
publish notice of the proposed action in the North Carolina Register. 
The notice must include the time and place of the public hearing (or 
instructions on how a member of the public may request a hearing); a 
statement of procedure for public comments; the text of the proposed 
rule or the statement of subject matter; the reason for the proposed 
action; a reference to the statutory authority for the action and the 
proposed effective date. 

Unless a specific statute provides otherwise, at least 15 days must 
elapse following publication of the notice in the North Carolina 
Register before the agency may conduct the public hearing and at least 
30 days must elapse before the agency can take action on the proposed 
rule. An agency may not adopt a rule that differs substantially from the 
proposed form published as part of the public notice, until the adopted 
version has been published in the North Carolina Register for an 
additional 30 day comment period. 

When final action is taken, the promulgating agency must file the 
rule with the Rules Review Commission (RRC). After approval by 
RRC, the adopted rule is filed with the Office of Administrative 
Hearings (OAH). 

A rule or amended rule generally becomes effective 5 business 
days after the rule is filed with the Office of Administrative Hearings 
for publication in the North Carolina Administrative Code (NCAC). 

Proposed action on rules may be withdrawn by the promulgating 
agency at any time before final action is taken by the agency or before 
filing with OAH for pubhcation in the NCAC. 



TEMPORARY RULES 

Under certain emergency conditions, agencies may issue temp 
rary rules. Within 24 hours of submission to OAH, the Codifier 
Rules must review the agency's written statement of findings of ne 
for the temporary rule pursuant to the provisions in G.S. 150B-21.1. 
the Codifier determines that the findings meet the criteria in G. 
150B-21.1, the rule is entered into the NCAC. If the Codifi 
determines that the findings do not meet the criteria, the rule is returof 
to the agency. The agency may supplement its findings and resubn 
the temporary rule for an additional review or the agency may respoi 
that it wiU remain with its initial position. The Codifier, thereafter, w 
enter the rule into the NCAC. A temporary rule becomes effecti^ 
either when the Codifier of Rules enters the rule in the Code or on fl 
sixth business day after the agency resubmits the rule without chang 
The temporary rule is in effect for the period specified in the rule or 1 i 
days, whichever is less. An agency adopting a temporary rule mu 
begin rule-making procedures on the permanent rule at the same tin 
the temporary rule is filed with the Codifier. 

NORTH CAROLINA ADMINISTRATIVE CODE 

The North Carolina Administrative Code (NCAC) is a compilatio 
and index of the administrative rules of 25 state agencies and 3 
occupational licensing boards. The NCAC comprises approximate! 
15,000 letter size, single spaced pages of material of which approx 
mately 35% is changed annually. Compilation and publication of th 
NCAC is mandated by G.S. 150B-21.18. 

The Code is divided into Titles and Chapters. Each state agency i 
assigned a separate title which is further broken down by chapter 
Title 21 is designated for occupational licensing boards. 

The NCAC is available in two formats. 

(1) Single pages may be obtained at a minimum cost of tw 
dollars and 50 cents ($2.50) for 10 pages or less, plus fiftee 
cents ($0.15) per each additional page. 

(2) The full publication consists of 53 volumes, totaling ii 
excess of 15,000 pages. It is supplemented monthly will 
replacement pages. A one year subscription to the ful 
publication including supplements can be purchased fo 
seven hundred and fifty dollars ($750.(X)). Individual vol 
umes may also be purchased with supplement service. Re 
newal subscriptions for supplements to the initial publicatio 
are available. 

Requests for pages of rules or volumes of the NCAC should b 
directed to the Office of Administrative Hearings. 

CITATION TO THE NORTH CAROLINA 
REGISTER 

The North Carolina Register is cited by volume, issue, pagf 
number and date. 1:1 NCR 101-201, April 1, 1986 refers to Volum( 
1 , Issue 1 , pages 101 through 201 oftiieNorth Carolina Register\ssMi<. 
on April 1, 1986. 



FOR INFORMATION CONTACT: Office of Administra- 
tive Hearings, ATTN; Rules Division, P.O. Drawer 27447, 
Raleigh, North Carolina 2761 1-7447, (919) 733-2678. 



NORTH 
CAROLINA 
REGISTER 




Office of Administrative Hearings 

P. ft Drawer 27447 

Raleigh, North Carolina 27611-7447 

(919) 733-2678 



Julian Mann III, 

Director 
James R. Scarcella Sr., 

Deputy Director 
Molly Masich, 

Director of APA Services 



Staff: 

Ruby Creech, 

Publications Coordinator 
Teresa Kilpatrick, 

Editorial Assistant 
Jean Shirley, 

Editorial Assistant 

This publication is printed on permanent, 
acid-free paper in compliance with 
as. 125-11.13. 



ISSUE CONTENTS 



I. EXECUTIVE ORDER 

Executive Order 60 877 

II, PROPOSED RULES 
Administration 

State Employees Combined 

Campaign 878 

Commerce 

Banking Commission 884 

Environment, Health, and 

Natural Resources 

Health Services 913 

Wildlife Resources 910 

Human Resources 

Facility Services . 890 

Insurance 

Departmental Rules 891 

Financial Evaluation Division . . . 892 

Life and Health Division 905 

Property & Casualty Division . . . 892 
Labor 

OSHA 906 

Licensing Board 

Professional Engineers & Land 

Surveyors 924 

Public Education 

Elementary & Secondary 920 

Transportation 

Highways, Division of 923 

III. LIST OF RULES CODIFIED ... 926 

IV. RRC OBJECTIONS 929 

V. CONTESTED CASE DECISIONS 

Index to AU Decisions 931 

Text of Selected Decisions 

93 DST 0475 941 

94 INS 0345 945 

VI. CUMULATIVE INDEX 954 



NORTH CAROLINA REGISTER 

Publication Schedule 

(April 1994 - January 1995) 



Volume 
and 
Issue 

Number 


Issue 
Date 


Last Day 

for 

Filing 


I^st Day 
for Elec- 
tronic 
Filmg 


Earliest 

Date for 

PubUc 

Hearing 

15 days 

from 

notice 


* End of 

Required 

Comment 

Period 

30 days 

from 

notice 


Last Day 

to Submit 

to RRC 


** Earliest 

Effective 

Date 


9:1 


04/04/94 


03/11/94 


03/18/94 


04/19/94 


05/04/94 


05/20/94 


07/01/94 


9:2 


04/15/94 


03/24/94 


03/31/94 


05/02/94 


05/16/94 


05/20/94 


07/01/94 


9:3 


05/02/94 


04/11/94 


04/18/94 


05/17/94 


06/01/94 


06/20/94 


08/01/94 


9:4 


05/16/94 


04/25/94 


05/02/94 


05/31/94 


06/15/94 


06/20/94 


08/01/94 


9:5 


06/01/94 


05/10/94 


05/17/94 


06/16/94 


07/01/94 


07/20/94 


09/01/94 


9:6 


06/15/94 


05/24/94 


06/01/94 


06/30/94 


07/15/94 


07/20/94 


09/01/94 


9:7 


07/01/94 


06/10/94 


06/17/94 


07/18/94 


08/01/94 


08/22/94 


10/01/94 


9:8 


07/15/94 


06/23/94 


06/30/94 


08/01/94 


08/15/94 


08/22/94 


10/01/94 


9:9 


08/01/94 


07/11/94 


07/18/94 


08/16/94 


08/31/94 


09/20/94 


11/01/94 


9:10 


08/15/94 


07/25/94 


08/01/94 


08/30/94 


09/14/94 


09/20/94 


11/01/94 


9:11 


09/01/94 


08/11/94 


08/18/94 


09/16/94 


10/03/94 


10/20/94 


12/01/94 


9:12 


09/15/94 


08/24/94 


08/31/94 


09/30/94 


10/17/94 


10/20/94 


12/01/94 


9:13 


10/03/94 


09/12/94 


09/19/94 


10/18/94 


11/02/94 


11/21/94 


01/01/95 


9:14 


10/14/94 


09/23/94 


09/30/94 


10/31/94 


11/14/94 


11/21/94 


01/01/95 


9:15 


11/01/94 


10/11/94 


10/18/94 


11/16/94 


12/01/94 


12/20/94 


02/01/95 


9:16 


11/15/94 


10/24/94 


10/31/94 


11/30/94 


12/15/94 


12/20/94 


02/01/95 


9:17 


12/01/94 


11/07/94 


11/15/94 


12/16/94 


01/03/95 


01/20/95 


03/01/95 


9:18 


12/15/94 


11/22/94 


12/01/94 


12/30/94 


01/17/95 


01/20/95 


03/01/95 


9:19 


01/03/95 


12/08/94 


12/15/94 


01/18/95 


02/02/95 


02/20/95 


04/01/95 


9:20 


01/17/95 


12/21/94 


12/30/94 


02/01/95 


02/16/95 


02/20/95 


04/01/95 



This table is published as a public service, arul the computation of time periods are not to be deemed binding 
or controlling. Time is computed according to 26 i\CAC 2B .0103 and the Rules of Civil Procedure, Rule 
6. 

* An agency must accept comments for at least 30 days after the proposed text is published or until the date 
of any public hearing, whichever is longer. See G.S. 150B-2 1.2(f) for adoption procedures. 
** The "Earliest Effective Date " is computed assuming that the agency follows the publication schedule above, 
that the Rules Review Commission approves the rule at the next caleruiar month meeting after submission, and 
that RRC delivers the rule to the Codifier of Rules five (5) business days before the 1st business day of the next 
calendar month. 



Re\ised 03/94 



EXECUTIVE ORDER 



EXECUTIVE ORDER NO. 60 

NORTH CAROLINA STATE 

DEFENSE MILITIA 

WHEREAS, pursuant to Article 5, Chapter 127 A 
of the General Statutes of North Carolina, provi- 
sions are made for the creation of the North 
Carolina State Defense Militia; and 

WHEREAS, the militia may serve the citizens of 
North Carolina through volunteer efforts in time of 
natural disaster, catastrophe or in the protection of 
lives and property as directed by the Governor; 

NOW, THEREFORE, by the authority vested in 
me by the laws and Constitution of the State of 
North Carolina, IT IS ORDERED: 

Section 1. Establishment. 



Pursuant to Article 5 of Chapter 127 A of the 
General Statutes, I hereby establish and organize 
the North Carolina State Defense Militia. The 
purpose of this Militia is to assume duties so 
assigned by the Governor or his designee, consis- 
tent with the laws of the United States and North 
Carolina. 

Section 2. Meetings. 

The North Carolina State Defense Militia is 
established within the Department of Crime Con- 
trol and Public Safety. The Militia shall be re- 
sponsible to and subject to the discretion and 
supervision of the Adjutant General of the North 
Carolina National Guard. I hereby delegate to the 
Secretary of Crime Control and Public Safety the 
authority to prescribe rules and regulations con- 
cerning the North Carolina State Defense Militia in 
accordance with N.C.G.S. 127A-80(c). 

Section 3. Commander. 

The Commander of the State Defense Militia 
shall be appointed by the Secretary of the Depart- 
ment of Crime Control and Public Safety to the 
rank of General Officer of the North Carolina 
State Defense Militia and shall serve at the plea- 
sure of the Secretary. All officers and soldiers 
shall be appointed in accordance with the rules and 
regulations established under Section 2 above and 
shall serve at the pleasure of the Secretary of 
Crime Control and Public Safety. 

Section 4. Effect on other Executive Orders. 

Executive Order No. 65 of the Martin Adminis- 
tration is hereby rescinded. 



This Order is effective immediately, and shall 
remain in effect until rescinded by further Execu- 
tive Order or other law. The provisions of 
N.C.G.S. 147-16.2 shall not apply to this 
Executive Order. 

Done in the Capital City of Raleigh, North 
Carolina, this the 22nd day of August, 1994. 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



877 



PROPOSED RULES 



TITLE 1 - DEPARTMENT OF 
ADMINISTRATION 

lyi otice is hereby given in accordance with G.S. 
150B-21.2 that the State Employees Combined 
Campaign intends to amend rules cited as 1 NCAC 
35 .0101. .0103. .0202 - .0203, .0302. .0305 - 
.0307; and adopt rule cited as 1 NCAC 35 .0205. 

1 he proposed effective date of this action is 
December 1, 1994. 

1 he public hearing will be conducted at 9:00 
a.m. on October 18. 1994 at the N. C. Department 
of Re\enue, Hearing Room - 1st Floor, 501 N. 
Wilmington Street, Raleigh, N. C. 

Keasonfor Proposed Action: To clarify the rights 
and responsibilities of the Statevyide Campaign 
Manager, Local Managers and participating 
organizations. 

(comment Procedures: Written comments should 
be mailed to: 

The Honorable Janice Faulkner 

Secretary 

N.C. Department of Re\enue 

501 N. Wdmington Street 

Raleigh, N.C. 27604-8001 

Written comments will be accepted until the close 
of the public hearing on October 18, 1994. 

CHAPTER 35 - STATE EMPLOYEES 
COMBINED CAMPAIGN 

SECTION .0100 - PURPOSE AND 
ORGANIZATION 

.0101 DEFINITIONS 

For purposes of this Chapter, the following 
definitions apply: 

(1) "Charitable organization." A non-partisan 
organization that is tax-exempt for both 
the IRS and N.C. tax purposes. The 
organization must receive contributions 
that are tax deductible by the donor. 

(2) "Audit" or "audited financial statement." 
An examination of financial statements of 
an organization by a CPA, conducted in 
accordance with generally accepted audit- 



ing standards, to determine whether, in 
the CPA's opinion, the statements con- 
form with generally accepted accounting 
principles or, if applicable, with another 
comprehensive basis of accounting. 

(3) "State Employees Combined Campaign" 
or "SECC." The official name of the 
state employees charitable fund-raising 
drive. 

(4) "Federation" or "Federated Group" 
means a group of voluntary charitable 
human health and welfare agencies orga- 
nized for purposes of supplying common 
fund-raising, administrative, and manage- 
ment services to its constituent members. 

(5) "Fund-raising expenses" (supporting 
activities) means expenses of all activities 
that constitute, or are an integral and 
inseparable part of, an appeal for finan- 
cial support. Fund-raising expenses 
represent the total expenses incurred in 
soliciting contributions, gifts, grants, 
etc.; participating in federated fund-rais- 
ing campaigns: maintaining donor mail- 
ing lists; preparing and distributing fund- 
raising manuals, instructions and other 
materials; and conducting other activities 
involved with soliciting contributions. 

(6) "Administrative expenses" (supporting 
activities) means expenses for reporting 
and informational activities related to 
business management and administrative 
activities which are neither educational, 
nor direct conduct of program services, 
nor fund-raising services. 

(7) "Program service expenses" means ex- 
penses for those activities that the report- 
ing organization was created to conduct 
which fulfill the purpose or mission for 
which the organization exists; exclusive 
of fund-raising and administrative ex- 
penses, and which, along with any activi- 
ties commenced subsequently, form the 
basis of the organization's current exemp- 
tion from tax. 

(8) "Fund-raising consultant" means any 
person who meets all of the following: 

(a) Is retained by a charitable organization 
or sponsor for a fixed fee or rate under 
a written agreement to plan, manage, 
conduct, consult, or prepare material 
for the solicitation of contributions in 
this State; 

fb) Does not solicit contributions or em- 
ploy, procure, or engage any person to 



878 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



solicit contributions: and 
fc) Does not at any time have custody or 
control of contributions. 
(9) "Fund-raising solicitor" means any per- 
son who, for compensation, does not 
qualify as a fund-raising consultant and 
does either of the following: 

(a) Performs any service, including the 
employment or engagement of other 
persons or services, to solicit contribu- 
tions for a charitable organization or 
sponsor: or 

(b) Plans, conducts, manages, consults, 
whether directly or indirectly, in con- 
nection with the solicitation of contribu- 
tions for a charitable organization or 
sponsor. 

Statutory Authority G.S. 143-3.3; 143B-10. 

.0103 ORGANIZATION OF THE 
CAMPAIGN 

The State Employees Combined Campaign 
Organization is as follows: 
(1) Chair. Each year the Governor may 
appoint a Statewide Combined Campaign 
Chair from one of the Executive Cabinet, 
Council of State, System of Community 
Colleges, or University Administration 
agencies. The Campaign Chair or the 
Campaign Chair's designee shall serve as 
director of the campaign. The responsi- 
bilities of the Chair include setting the 
dates and approving the published materi- 
als for the Combined Campaign, con- 
tracting for the Statewide Campaign 
Manager, and appointing and serving as 
chair of the SECC Advisory Committee. 
For the purposes of selecting a Statewide 
Campaign Manager, the Statewide Com- 
bined Campaign Chair will consider the 
following criteria: 

(a) The organization must have demonstrat- 
ed ability to manage large-scale fund- 
raising campaigns. 

(b) The organization must have the ability 
and willingness to work with a state- 
wide system of local organizations 
capable of eflFectively managing local 
combined campaigns and relating to the 
Statewide Campaign Manager. 

(c) The organization must have an accept- 
able record of financial accountability. 

(d) The organization must be a tax-exempt 
organization under the Internal Revenue 



Code, 
(e) The organization must be willing and 
able^ if required, to provide a bond in 
an amount satisfactory to the SECC 
Advisory Committee to protect the 
participant organizations and donors. 

(2) SECC Advisory Committee. This ongo- 
ing committee serves as a central applica- 
tion point for all charitable organizations 
applying to participate in the SECC. The 
committee recommends overall policy for 
the campaign to the Governor, the State- 
wide Campaign Chair, and necessary 
state agencies and recommends the crite- 
ria for participation by charitable organi- 
zations. The committee reviews the 
recommendations made by the Statewide 
Campaign Manager and accepts or rejects 
its recommendations. The committee 
may, in its discretion, require the State- 
wide Campaign Manager to provide a 
bond, as provided in Item (l)(e) of this 
Rule. The committee is composed of at 
least 10 state employee members appoint- 
ed by the Statewide Campaign Chair. 
Members serve three-year staggered 
terms at the pleasure of the Statewide 
Campaign Chair. If a vacancy occurs, 
the Statewide Campaign Chair shall 
appoint a replacement to fill the unex- 
pired term. Any member may be reap- 
pointed at the end of his or her term. 

(3) Statewide Campaign Manager. The 
Statewide Campaign Manager shall be 
selected by the Statewide Campaign 
Chair. The duties of the Statewide Cam- 
paign Manager include, but are not limit- 
ed to, the following: 

(a) serving as the financial administrator of 
the SECC; 

(b) determining if the applicant agencies 
meet the requirements of Rule .0202 of 
this Chapter; 

(c) submitting to the Statewide Campaign 
Chair the name of an organization to 
serve as Local Campaign Manager; 

(d) providing the necessary supervision of 
data processing services in order to 
process all payroll deduction pledge 
forms of state employees; 

(e) receiving reports from the Local Cam- 
paign Manager; 

(f) transmitting to each Local Campaign 
Manager its share of the state employ- 
ees payroll deduction funds; 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



879 



PROPOSED RULES 



n 



(g) printing and distributing the pledge 
form, the campaign report form and 
collection envelopes to the Local Cam- 
paign Manager; 
(h) maintaining an accounting of all funds 
raised and submitting an interim unau- 
dited end-of-campaign report of the 
following: 
(i) amounts contributed and pledged; 
(ii) number of contributions; and 
(iii) amounts distributed to each participat- 
ing agency; 
(i) Once applications for acceptance into 

the campaign have been recommended 
to the SECC Advisory Committee by 
the Statewide Campaign Manager, 
preparing a list of all accepted organi- 
zations and distributing them to all 
applicants. 

(4) Local Campaign Chair. The Governor, 
if asked by the local charitable organiza- 
tions accepted into the Combined Cam- 
paign, may appoint an area representative 
from either state government or the 
University of North Carolina system to 
serve as the Local Chair. This person 
will be responsible for forming a Local 
Advisory Committee for recruitment of 
volunteer state employees. The Local 
Advisory Committee is responsible for 
the approval of local campaign literature, 
the establishment of local goals as need- 
ed, and the distribution of any un- 
designated funds made available for 
distribution. 

(5) The Campaign Chair shall approve or 
reject the State Campaign Manager's 
recommendation for Local Campaign 
Manager and name an agency as the 
Local Campaign Manager. The Local 
Campaign Manager must identify itself 
on all printed materials as the local man- 
ager of the SECC rather than of any 
other organization. 

(a) For the purpose of selecting a Local 
Campaign Manager, the Statewide 
Campaign Chair and Statewide Cam- 
paign Manager will consider the follow- 
ing criteria: 
(i) whether the local organization is 

willing to conduct a local SECC; 
(ii) whether the organization agrees to 
comply with the terms of the 
State/Local Managers contract; 
(iii) whether the organization has a broad 



base of community and state employ- 
ee support and volunteer involvement; 
(iv) whether the organization has a dem- 
onstrated ability and successful history 
of managing fund-raising campaigns 
that include: 

(A) development of campaign strate- 
gy; 

(B) development of campaign materi- 
als; 

(C) development of volunteer cam- 
paign structures; 

(D) training of volunteer solicitors; 

(E) a financial structure and resources 
that can efficiently manage, ac- 
count for, and disburse funds; 

(F) being a participant organization of 
the campaign; 

(G) ability to develop financial rela- 
tionships with a network of state- 
wide organizations so as to ensure 
the orderly transmittal, disburse- 
ment, accounting of, and report- 
ing of donations and pledgesT j 

(v) whether the organization is willing 
and able to provide a bond, if 
required, in an amount satisfactory to 
the SECC Advisory Committee to 
protect the participant organizations 
and donors. 

(b) The Local Campaign Manager shall 
assist the Local Campaign Chair and 
Local Campaign Advisory Committee 
in the printing and distribution of 
campaign literature, the collection of 
pledge reports and envelopes from the 
state agency volunteers, the 
development of campaign reports, and 
the forwarding of one copy of each 
payroll deduction pledge to the 
Statewide Campaign Manager. In 
addition, an end of campaign report 
shall be sent to the Statewide Campaign 
Manager by February i following the 
close of the campaign on December 31 
for inclusion in the required fiscal 
reports. 

(c) The Local Campaign Manager shall: 
(i) establish an interest-bearing account 

with a bank in order to receive 
deposits of collected funds,. Interest 
earnings shall be disbursed to each 
participating federation and 
independent agency based on its 
proportionate share of the campaign's 



880 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



total gross contributions : and 

(ii) distribute the funds from the 

contributions in accordance with 

designations made by state employees. 

Undesignated funds shall be 

distributed in accordance with the 

rules in this Chapter. Each Local 

Campaign Manager shall disburse 

contributions, at least four times a 

year, to participating federations and 

independent agencies; 

(iii) be permitted to deduct, before any 

disbursements are made, direct costs 

of operating the campaign from the 

gross contributions, and shall charge 

each federation or independent agency 

its proportionate share of the 

campaign's operational cost. The 

Local Campaign Manager shall justify 

the actual costs of the campaign. 

which should not exceed 10% of 

gross receipts; and 

(iv) notify the federations and independent 

agencies no later than March I 

following the close of the campaign 

on December 31 of the amounts 

designated them and their member 

agencies and of the amounts of the 

undesignated funds allocated to them. 

Note: A contract between the state and the 

Statewide Campaign Manager, and the Statewide 

and Local Campaign Managers, will be executed 

in order to develop an acceptable audit trail. The 

contracts will allow a reasonable charge for 

campaign expenses to be claimed by the Statewide 

Campaign Manager and the Local Manager. All 

terms and conditions of these contracts are subject 

to review and approval by the Statewide Campaign 

Chair. 

The Statewide Campaign Manager and Local 
Campaign Managers shall recover from gross 
receipts of the campaign their expenses which 
should reflect the actual costs of administering the 
campaign. Actual costs of the campaign must be 
justified and should not exceed 10% of gross 
receipts. The campaign expenses shall be shared 
proportionately by all the recipient organizations 
reflecting their percentage share of gross campaign 
receipts. 

The failure of the Statewide Campaign Manager or 
the Local Campaign Manager to perform any of ]ts 
respective responsibilities listed in this Section may 
be grounds for removal and disqualification by the 
Chair to serve in its capacity for one year. Before 
deciding on removing or disqualifying a manager. 



the Chair shall give the manager an opportunity to 
respond to any allegations of failure to perform its 
responsibilities. The manager must submit its 
response to the Chair within 10 days from 
notification postmark date. The Chair shall issue 
a written determination based on a review of all of 
the information submitted. 

Statutory Authority G.S. 143-3.3; 143B-10. 

SECTION .0200 - APPLICATION PROCESS 
AND SCHEDULE 

.0202 CONTENT OF APPLICATIONS 

(a) All organizations seeking inclusion in the 
State Employees Combined Campaign must submit 
an application to the state campaign. The 
application must include a completed State 
Employees Combined Campaign Certificate of 
Compliance, provided by the Statewide Campaign 
Manager. Included in or attached to the 
Certificate of Compliance must be: 

(1) A letter from the board of directors 
requesting inclusion in the campaign. 

(2) A complete description of services 
provided, the service area of the 
organization, and fund 

raising/administrative costs the 

percentage of its total su pport and 
revenue that is allocated to 
administration and fund-raising . 

(3) The most recent audited financial 
statement prepared by a CPA within the 
past two years. The year end of such 
audited financial statement must be no 
earlier than two years prior to the 
current year's campaign date. The 
SECC Advisory Committee may grant 
an exception to this requirement if an 
organization has filed its Articles of 
Incorporation with the Secretory of 
Sfate's Oflice since March 1 of the 
preceding year of the current campaign. 

(4) A copy of the organization's IRS 990 
form or sufficient documentation to 
indicate program services, 
administrative and fund-raising 
expenses. 

(5) i4) A board statement of assurance of 
non-discrimination of employment, 
board membership and client services. 

(6) i§^ A description of the origin, 
purpose and structure of the 
organization. 

(7) ^ A list of the current members of 



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881 



PROPOSED RULES 



the board, including their addresses. 

(8) ^ A letter from the board of directors 
certifying compliance with the 
eligibility standards listed in Paragraph 
(b) of this Rule. 

£9} f8) When a federated fund-raising 
organization submits an application^ 
they may submit the credentials of the 
federation only, not each member 
agency. By the submission of such, the 
federations certify that all of their 
member agencies comply with all the 
SECC regulations, unless there are 
exceptions. If there are exceptions to 
the requirements, the federations must 
disclose such and explain to the 
satisfaction of the Statewide Combined 
Campaign Advisory Committee the 
reasons for the exception. 
The SECC Advisory Committee may 
elect to review, accept or reject the 
certifications of the eligibility of the 
member agencies of the federations. If 
the Committee requests information 
supporting a certification of eligibility, 
that information shall be furnished 
promptly. Failure to furnish such 
information within 10 days of the 
notification postmark date constitutes 
grounds for the denial of eligibility of 
that member agency. 

(10) The SECC Advisory Committee may 
elect to decertify a federation or 
independent agency which makes a 
false certification, subject to the 
requirement that any federation or 
independent agency that the Committee 
proposes to decertify shall be notified 
by the Statewide Campaign Manager of 
the Committee's decision stating the 
grounds for decertification. 
The federation or independent agency 
may file an appeal to the Committee 
within 10 days of the notification 
postmark date. False certifications are 
presumed to be deliberate. The 
presumption may be overcome by 
evidence presented at the a ppeal 
hearing. 
(b) Organizations must meet the following 
criteria to be accepted as participants in the 
Combined Campaign: 

(1) Must be licensed to solicit funds in 
North Carolina if a license is required 
by law. 



(2) Must provide written proof of tax 
exempt status for both federal and N.C. 
tax purposes. Organizations must 
certify that contributions from state 
employees are tax deductible by the 
donor under N.C. and federal law. 

(3) Must prepare and make available to the 
general public an audited financial 
statement. The SECC Advisory 
Committee may grant an exception to 
this requirement if an organization has 
filed its Articles of Incorporation with 
the Secretary of State's Office since 
March 1 of the preceding year of the 
current campaign. 

(4) If fund-raising and administrative 
expanses are in excess of 25 percent of 
total revenue, must demonstrate to the 
satisfaction of the SECC that those 
expenses for this purpose are 
reasonable under all the circumstances 
of the case. The SECC may reject any 
a pplication from an agency with fund- 
raising and administrative expenses in 
excess of 25 percent of total revenue, 
unless the agency demonstrates to the 
satisfaction of the Committee that its 
actual expenses for those purposes are 
reasonable under all the circumstances 
in its case. 

(5) Must certify that all publicity and 
promotional activities are truthful and 
non-deceptive and that all material 
provided to the SECC is truthful^ «ftd 
non-deceptive^ includes all material 
facts, and makes no exaggerated or 
misleading claims . 

(6) Must agree to maintain the 
confidentiality of the contributor list. 

(7) Must permit no payments of 
commissions, kickbacks, finders fees, 
percentages, bonuses, or overrides for 
fund-raising, and permit no paid 
solicitations of the public by a fund- 
raising consultant or solicitor . 

(8) Must have a policy of non- 
discrimination on the basis of race, 
color, religion, sex, age, national origin 
or physical or mental disability for 
clients of the agency, employees of the 
agency and members of the governing 
board. 

(9) Must provide benefits or services within 
the local community, meaning that 
employees in the solicitation area or 



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PROPOSED RULES 



their Ikmilies should be able to receive 
benefits or services from the agency 
within a reasonable distance. Examples 
of services include: 

(A) research and education in the health 
and welfare or education fields; 

(B) family and child care services; 

(C) protective services for children and 
adults; 

(D) services for children and adults in 
foster care; 

(E) services related to the management 
and maintenance of the home; 

(F) day care services for adults and 
children; 

(G) transportation services, information 
referral and counseling services; 

(H) the preparation and delivery of meals; 

(I) adoption services; 

(J) emergency shelter care and relief 

services; 
(K) safety services; 
(L) neighborhood and community 

organization services; 
(M) recreation services; 
(N) social adjustment and rehabilitation 

services; 
(O) health support services; or 
(P) a combination of services designed to 
meet the needs of special groups such 
as the elderly or disabled. 
However, an international organization which 
provides health and welfare services overseas, 
whose activities do not require a local presence 
and which meet other eligibility criteria, may be 
accepted for participation in the campaign. 

Statutory Authority G.S. 143-3.3; 143B-10. 

.0203 REVIEW AND SCHEDULE 

Complete applications must be submitted to the 

Statewide Combined Campaign Advisory 

Committee Campaign Manager by February 15 
annually to be included in the fall campaign. 
Incomplete applications may not be considered by 
the Committee. The — Chair will — forward all 
application materials to the Statewide Campaign 
Manager — within — three — working — d^i-s — after — the 
clo s ing — deadline. The Statewide Campaign 
Manager will report to the Committee its 
recommendation on each application within three 
weeks of the closing deadline. The Committee 
shall affirm or reject each recommendation by the 
Statewide Campaign Manager and wiH shall inform 
the Statewide Campaign Manager of its decisions. 



The Statewide Campaign Manager and the 
Committee shall review the a pplication materials 
for accuracy, completeness and compliance with 
these regulations. The Committee may reject an 
application for failing to meet any of the criteria 
outlined in Rule .0202 of this Section or for 
violating the rules of the SECC. Failure to supply 
any of the information required by the application 
may be judged a failure to comply with the 
requirements of public accountability, and the 
applicant may be ruled ineligible for inclusion. 

The Statewide Campaign Manager or the 
Committee may request such additional 
information as they deem necessary to complete 
these reviews. An organization that fails to 
comply with such requests within 10 days of the 
notification postmark date may be judged 
ineligible. 

Statutory Authority G.S. 143-3.3; 143B-10. 

.0205 AGREEMENTS 

(a) Following acceptance into the SECC. 
federations and independent agencies shall execute 
a contract with the State. The parties shall agree 
to abide by the terms and conditions of the 
regulations. The contract shall be signed by the 
State Chair, the Statewide Campaign Manager, the 
organization's board chair and the organization's 
chief executive officer. 

(b) Each federation shall accept responsibility 
for the accuracy of the distribution amount to their 
member agencies. Each federation must be able to 
justify amounts deducted from their disbursements 
to participating agencies. These deductions should 
not exceed 10% of gross receipts. Each federation 
must be willing and able to provide a bond, jf 
required, in an amount satisfactory to the SECC 
Advisory Committee to protect the participant 
organizations and donors. 

Statutory Authority G.S. 143-3.3; 143B-10. 

SECTION .0300 - GENERAL PROVISIONS 

.0302 COERCIVE ACTIVITIES 
PROfflBITED 

(a) In order to insure that donations are made on 
a voluntary basis, actions that do not allow free 
choice or that create an impression of required 
giving are prohibited. Peer solicitation is 
encouraged. Employee gifts shall be kept 
confidential, except that employees may opt to 
have their designated contributions acknowledged 
by the recipient organizations. 



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PROPOSED RULES 



(b) The following activities are not permitted: 

(1) The providing and using of contributor 
lists for purposes other than the routine 
collection, forwarding, and 
acknowledgement of contributions. 
Recipient organizations that receive the 
names and addresses of state employees 
must segregate this infbrmation from all 
other lists of contributors and only use 
the lists for acknowledgement purposes. 
This segregated list may not be sold or 
in any way released to anyone outside 
of the recipient organization. Failure to 
protect the integrity of this information 
may result in penalties up to expulsion 
from the campaign. 

(2) The establishment of personal dollar 
goals or quotas. 

(3) The developing and using of lists of 
non-contributors. 

(c) Violations of these Rules by a participant 
organization may result in the decertification of the 
organization. The organization shall be given 
notice of an opportunity to be heard prior to any 
action being taken by the Committee. Any organi- 
zation who is dissatisfied with the determination of 
its decertification may file an appeal to the Com- 
mittee within 10 days of the notification postmark 
date. An organization who is dissatisfied with 
either the Committee's decision or the appeal 
determination of the Committee may commence a 
contested case by filing a petition under G.S. 
150B-23 within 60 days of notification postmark 
date of the Committee's decision. 

Statutory Authority G.S. 143-3.3; 143B-10. 

.0305 CAMPAIGN LITERATURE 

Each charitable organization accepted as a part of 
the campaignj^ 

(1 ) must Shall provide adequate information 
about its services including administra- 
tive/fund-raising costs, to the Local 
Campaign Manager for use in the local 
campaignr ; and 

(2) Shall not be listed more than one time in 
the campaign literature. 



employee will be given a list of the approved 
agencies in the campaign in order to help them 
make the decision. The state employee may only 
designate the federations and agencies that are 
listed. Write-ins are prohibited. 

(b) Designations made to organizations not listed 
are not invalid, but will be treated as undesignated 
funds and distributed accordingly. 

(c) Contributions designated to a federation will 
be shared in accordance with the federation's 
policy. 

Statutory Authority G.S. 143-3.3; 143B-10. 

.0307 DISTRIBUTION OF UNDESIGNATED 
FUNDS 

Any monies not designated to a particular recipi- 
ent shall be deemed as undesignated funds. 
Undesignated fundis shall be allooatod by the SECC 
to the local SECC committees. — The local SECC 
8baH — distribute — thcac — funds — within — tbetf 
communities. The local SECC shall communicate 
in campaign literature how the undesignated funds 
will be allocated in their local campaigns and shall 
distribute these funds to approved agencies and 
federations. 

Statutory Authority G.S. 143-3.3; 143B-10. 

TITLE 4 - DEPARTMENT OF 
COMMERCE 

jyiotice is hereby given in accordance with G.S. 
1508-21. 2 that the North Carolina Banking Com- 
mission intends to adopt rules cited as 4 NCAC 3K 
.0101. .0201 -.0206, .0301 -.0302, .0401 -.0405. 
.0501 -.0502, .0601, .0701 -.0703. 

1 he proposed effective date of this action is 
December 1, 1994. 

1 he public hearing will be conducted at 9:00 
a.m. on October 13. 1994 at the Dobbs Building, 
430 North Salisbury Street, Room #6227, Raleigh, 
North Carolina. 



Statutory Authority G.S. 143-3.3; 143B-10. 

.0306 DESIGNATION CAMPAIGN 

(a) Each employee shall be given the opportuni- 
ty to designate which agency or group of agencies 
shall benefit from his or her contribution to the 
State Employees Combined Campaign. Each 



MXeason for Proposed Action: 
4 NCAC 3K .0101 - Provides definitions for 
terminology used in the reverse mortgage rules. 
4 NCAC 3K . 0201 - Pro\ides persons interested in 
making reverse mortgage loans more specific 
guidance on the application process to become an 



884 



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PROPOSED RULES 



authorized reverse mortgage lender. 
4 NCAC 3K .0202 - Provides the notification 
process for those persons not required to obtain 
authorization as a reverse mortgage lender 
4 NCAC 3K .0203 - Provides the process by which 
the applicant will notify the Commission of any 
material changes to his or her application to be a 
reverse mortgage lender. 

4 NCAC 3K .0204 - Responds to the requirement 
that the Commission set by rule fees for annual 
registration. 

4 NCAC 3K .0205 - Provides for the issuance of 
a certificate of authorization upon the approval by 
the Commissioner to be a reverse mortgage lender. 
4 NCAC 3K.0206 - Details the effects of a change 
in organization in entities authorization to be a 
reverse mortgage lender 

4 NCAC 3K . 0301 - Provides for a minimum net 
worth requirement in order to insure that the 
authorized lenders are adequately capitalized. 
4 NCAC 3K .0302 - Provides that authorized 
lenders post a surety bond in order to protect 
potential borrowers. 

4 NCAC 3K .0401 - .0405 - Responds to the 
requirement that the Commission adopt rules in 
order to protect the public interest and insure that 
statutory requirements are being met. 
4 NCAC 3K .0501 - Consistent with federal regu- 
lation, this rule requires that authorized lenders 
disclose to borrowers all terms and conditions of 
reverse mortgage loans. 

4 NCAC 3K.0502 - Clarifies the types of fees that 
a reverse mortgage lender can charge to a poten- 
tial borrower as an application fee. 
4 NCAC 3K .0601 - Provides that a potential 
borrower receive counseling on reverse mortgage 
lending prior to receiving a loan. 
4 NCAC 3K .0701 - .0703 - Responds to the 
requirement that the Commission adopt rules in 
order to implement and enforce the Reverse Mort- 
gage Act and protect the public interest. 

Lyomment Procedures: Comments must be submit- 
ted in writing not later than Monday, October 1 7, 
1994. Written comments should be directed to: 
Garistine M. Davis, Counsel 
North Carolina Banking Commission 
P O. Box 29512 
Raleigh, NC 27626-0512 

CHAPTER 3 - BANKING COMMISSION 

SUBCHAPTER 3K - REVERSE 
MORTGAGES 



SECTION .0100 - ADMINISTRATIVE 

.0101 DEFINITIONS; FILINGS 

(a) As used in these Rules, unless the context 
clearly requires otherwise: 

£1} Terms defined in OS^ 53-257 shall 
have the same meaning as set forth 
therein; 

(2) "Accounting period" shall mean either 
a period of 12 months (or less in the 
first year of operation) ending Decem- 
ber 3i or a fiscal year of not more than 
12 months (or less in the first year of 
operation) ending on the last day of any 
month except December: 

(3) "A pplication fee" shall mean any fee 
accepted by an authorized lender or 
lender in connection with an application 
for a reverse mortgage loan including 
any charge for soliciting, processing, 
placing or negotiating a reverse mort- 
gage loan. The term does not include 
a third-party fee as such term is defined 
in Paragraph (a) of this Rule: 

(4) "Certified Financial Statements" shall 
mean the Statement of Financial Posi- 
tion. Income Statement. Statement of 
Cash Flows, and Statement of Retained 
Earnings which have been attested by a 
certified public accountant. 

(5) "Person" shall mean an individual, 
corporation, partnership, trust, associa- 
tion, other entity: 

(6) "Regulation Z" shall mean Regulation 
Z as promulgated by the Board of 
Governors of the Federal Reserve 
System and codified at 12 CFR Part 
226. el seq. ; 

{7} "RESPA" shall mean the Real Estate 
Settlement Procedures Act, codified at 
12 use 2601. et seq.\ 

(8) "Third-Party fee" shall mean the fees or 
charges paid by the borrower for a 
mortgage loan to the lender for trans- 
mittal to third persons who provide 
services in connection with the mort- 
gage loan, including, but not limited to. 
recording taxes and fees, reconveyance 
or releasing fee, appraisal fees, credit 
report fees, attorney's fees, fees for 
title reports and title searches, title 
insurance premiums, surveys and simi- 
lar charges; 

(9) "Truth In Lending Act" shall mean 



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Title I of the Consumer Credit Protec- 
tion Act, as amended, and codified at 
15 use 1601, el seq.. 
(b) Any application for authorization to make 
reverse mortgage loans, or any report, annual 
statement, amendment to application, notice or 
other document which is required by law or rule to 
be filed with the Commissioner shall be addressed 
as follows: 

Commissioner of Banks 

Post Office Box 29512 

Raleigh, North Carolina 27626-0512. 



Statutory Authority G.S. 53-257; 53-259; 53- 
271(a). 

SECTION .0200 - AUTHORIZATION 
OF REVERSE MORTGAGE LENDERS 

.0201 APPLICATION FOR 

AUTHORIZATION AS A 
REVERSE MORTGAGE LENDER 

(a) No person shall make reverse mortgage 
loans pursuant to the Reverse Mortgage Act 
without first obtaining authorization from the 
Commissioner. An application for authorization to 
make reverse mortgage loans shall be obtained 
from the Commissioner and shall be filed pursuant 
to Rule .0101 (b) of this Subchapter. 

(b) The following fees shall be submitted with 
the application for authorization to make reverse 
mortgage loans: 

(1) A non-refundable application fee made 
payable to the Commissioner in the 
amount set forth in G.S. 53-258(b); 

(2) An annual fee made payable to the 

53- 



Commissioner as set forth in G.S. 

258(d). 

(c) The application shall be in writing and 
verified by the oath of the applicant. 

(d) The Commissioner may require information 
as deemed necessary to make the determination 
required by G.S. 53-258(d). 

(e) In the event of denial of an application, the 
Commissioner shall refund in full any annual fee 
paid pursuant to G.S. 53-258(d). 

(f) Incomplete application files may be closed 
and deemed denied without prejudice when the 
a pplicant has not submitted information requested 
by the Commissioner within 30 days of the re- 
quest. 

Statutory Authority G.S 53-258; 53-259; 53-264; 
53-271 (a). 



.0202 NOTIFICATION OF INTENT 
TO ENGAGE IN REVERSE 
MORTGAGE LENDING 

Any person not required to obtain authorization 
as a reverse mortgage lender pursuant to G.S. 53- 
258(c) must notify the Commissioner of its intent 
to engage in reverse mortgage lending. Notifica- 
tion shall be made on a form obtained from the 
Commissioner and shall be filed pursuant to Rule 
.0101 of this Subchapter. 

Statutory Authority G.S. 53-258(a)(c); 53-259; 53- 
271(a). 

.0203 CURRENT AUTHORIZED 
LENDER INFORMATION 

(a) An authorized lender shall notify the Com- 
missioner within 30 days of the efl^ective date of 
any material changes to the information on file 
with the Commissioner. 

£b} Notification to the Commissioner of all 
material changes shall be made on the authorized 
lender's letterhead and filed pursuant to Rule 
.0101 rb) of this Subchapter. 

(c) For the purposes of this Rule, the term 
"material" shall mean any information which 
would be likely to influence the granting of autho- 
rization to engage in reverse mortgage lending. 
The term "material" shall also include but not be 
limited to information concerning changes in the 
address of the authorized lenders, directors, 
corporate officers, partners, or the business struc- 
ture. It shall also include changes in the address 
of the authorized lender's main or branch offices 
and any names under which the applicant operates. 

Statutory Authority G.S. 53-258(d); 53-259; 53- 
271(a). 

.0204 ANNUAL REGISTRATION FEE 

(a) On or before December 31 of each year, 
each authorized lender shall pay the annual fee set 
forth in G.S. 53-258(d). 

rb) Failure of an authorized lender to pay the 
annual fee as of the date specified in Paragraph (a) 
of this Rule shall be grounds for revocation of its 
authorization pursuant to G.S. 53-27 1(a). 

Statutory Authority G.S 53-258(d); 53-259; 53- 

271(a). 

.0205 CERTIFICATE OF AUTHORIZATION 

(a) Upon receipt of a completed application and 
compliance with Sections .0200 and .0300 of this 
Subchapter, and payment of the fees, the Commis- 



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PROPOSED RULES 



sioner shall investigate the applicant pursuant to 
G.S. 53-258. If the Commissioner finds the 
applicant has met the provisions of G.S. 53-258. 
the Commissioner shall authorize the applicant as 
a reverse mortgage lender. 

(b) An authorized lender shall post its Certificate 
of Authorization in plain view of its customers at 
its principal oflFice. each of its branch offices in 
this State and any branch offices outside of this 
State at which reverse mortgage loans are to be 
originated or made on residential real property 
located in North Carolina. 

(c) An authorized lender shall notify the Com- 
missioner of a change in the name under which it 
operates or the address of its principal office and 
any branch office as set forth in Paragraph (a) of 
this Rule. Notification shall be made at least 30 
days prior to the effective date of such change, and 
shall consist of: 

the new name or address; and 



m 



a reissuance fee of twenty-fiv e dollars 
($25.00) per certificate issued payable 
to the Commissioner. 
(d) Upon receipt of a Certificate of Authoriza- 
tion which contains the new address, an authorized 
lender shall surrender its former Certificate of 
Authorization to the Commissioner. 

(el Failure to surrender the former Certificate of 
Authorization may result in suspension of authori- 
zation as a reverse mortgage lender pursuant to 
Rule .0702 of this Subchapter. 



lender's general partners: 

(B) The conversion of the general partner- 
ship into a limited partnership, corpo- 
ration or sole proprietorship: 

(C) The conversion of the limited partner- 
ship into a general partnership, corpo- 
ration or sole proprietorship. 

(3) If the authorized lender is a sole propri- 
etor: 

(A) The conversion of the sole proprietor- 
ship into a general or limited partner- 
ship or corporation: 

(B) TTie sale of all of the assets of the 
authorized lender's business to anoth- 
er person. 

(c) Upon a change in organization as set forth in 
Paragraph (b) of this Rule, the authorized lender's 
registration shall become void and the authorized 
lender shall surrender its Certificate of Authoriza- 
tion to the Commissioner within 30 days of such 
change. If the entity which results from the 
change in the authorized lender's organizational 
structure would like to engage in business as a 
reverse mortgage lender in this State, it shall apply 
for authorization pursuant to Rule .0201 of this 
Section. 

(d) Temporary authorization may be granted at 
the discretion of the Commissioner for a transferee 
or assignee to make reverse mortgage loans, while 
waiting for authorization pursuant to Rule .0201 of 
this Section. 



Statutory Authority G.S. 53-257(6), 53-258; 53- 
259; 53-271 (a). 



Statutory Authority G.S. 53-258(d); 53-259; 53- 
271(a). 



.0206 NONTRANSFERABILITY OF 

CERTIFICATE OF AUTHORIZATION 

(a) A Certificate of Authorization shall be 
neither transferrable nor assignable. 

(b) TTie circumstances under which the Commis- 
sioner shall deem a change in the authorized 
lender's organizational structure to constitute a 
transfer or assignment of the Certificate of Autho- 
rization shall include, but not be limited to. the 
following: 

(U If the authorized lender is a corpora- 
tion: 

(A) A change in ownership of 50% or 
more of the authorized lender's stock; 

(B) The conversion of the corporation into 
a general or limited partnership or 
sole proprietorship. 

121 If the authorized lender is a general or 
limited partnership: 
(A) A change in one of the authorized 



SECTION .0300 - REQUIREMENTS 
FOR AUTHORIZATION 

.0301 MINIMUM NET WORTH 

REQUIREMENT FOR AUTHORIZED 
LENDER OR LENDERS 

All authorized lenders shall have, at all 
a net worth of at least five hundred thou- 



lal 
times, 
sand dollars ($500.000). 

(b) For any year in which a lender seeks to rely 
on the capital of its parent to satisfy the require- 
ments of Paragraph (a) of this Rule, it shall pro- 
vide to the Commissioner: 

(1) Certified financial statements of the 
parent showing a net worth of at least 
one million dollars ($1.000.000) as of 
the close of its most recent fiscal year; 
and 

(2) A binding written commitment from the 
parent to the lender to make a minimum 



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887 



PROPOSED RULES 



of one million dollars ($1,000,000) 
available to the lender as a capital 
contribution in connection with its 
reverse mortgage lending program. 

Statutory Authority G.S. 53-258(b); 53-259; 53- 
271(a). 

.0302 SURETY BONDS 

(a) All authorized lenders shall post a surety 
bond in the amount of one hundred thousand 
dollars ($100,000) with the Commissioner which 
shall run to the benefit of the Commissioner. The 
bond shall be executed by an insurance company 
authorized to do business in North Carolina and 
not affiliated with the lender. The bond shall be 
conditioned upon the authorized lender's compli- 
ance with the provisions of G.S. 53-255 et. seq. 
and all rules adopted thereunder. 

(b) All authorized lenders which are approved 
by the Commissioner on or after the effective date 
of this rule shall meet the requirements of this 
Rule upon approval. Authorized lenders which 
were approved by the Commissioner before the 
effective date of this Rule shall have until March 
31, 1995 to comply with this Rule. 

Statutory Authority G.S 53-258(b); 53-259; 53- 

271(a). 

SECTION .0400 - OPERATIONS, 
NOTIFICATIONS, AND REPORTING 

.0401 CERTIFIED FINANCIAL 
STATEMENTS 

(a) No later than 90 days after the end of the 
authorized lender's accounting period, certified 
financial statements shall be filed with the Com- 
missioner, and shall be filed pursuant to Rule 
.0101 of this Subchapter. 

(b) Failure of an authorized lender to submit 
certified financial statements in the manner re- 
quired by this Rule shall be grounds for revocation 
of its authorization pursuant to G.S. 53-271(a). 

Statutory Authority G.S. 53-259; 53-271 (a). 

.0402 RECORD AND BOOKKEEPING 
REQUIREMENTS 

(a) All lenders shall maintain their books and 
records relating to the making of reverse mortgage 
loans for a period of three years after payment of 
the debt in a manner permitting inspection by the 
Commissioner. 

(b) All financial records required by Paragraph 



(a) of this Rule shall be prepared in accordance 
with generally accepted accounting principles. 

(c) An authorized lender shall notify the Com- 
missioner of any change in the location of its 
books and records. 

(d) In the case of an out-of-state lender, the 
lender shall designate the Commissioner as agent 
for service of process in connection with any 
reverse mortgage loan transaction. 

Statutory Authority G.S. 53-259; 53-270; 53-271. 

.0403 EXAMINATIONS 

The Commissioner may make such examination 
of the books, records and affairs of authorized 
lenders under this act at such times as he may 
deem necessary or desirable. 

Statutory Authority G.S 53-259; 53-270; 53-271. 

.0404 WTTHDRAWAL/ TERMINATION OF 
AUTHORIZATION AS REVERSE 
MORTGAGE LENDER 

(a) An authorized lender shall notify the Com- 
missioner in writing of jts decision to cease opera- 
tions as a reverse mortgage lender in this State 
within 30 days of such decision. 

(b) An authorized lender shall surrender its 
Certificate of Authorization to the Commissioner 
no later than 30 days after it has ceased operations 
in this State or upon revocation, temporarily or 
permanently, of the reverse mortgage lender's 
authorization. 

(c) Failure to comply may result in a fine to the 
principal officers, partners, directors, controlling 
persons, pursuant to G.S. 53-271. 

Statutory Authority G.S. 53-259; 53-271 (a). 

.0405 IMPAIRMENT OF MINIMUM 

NET WORTH, AND SURETY BOND 

(a) An applicant shall notify the Commissioner 
in writing if, at any time, it fails to meet the 
minimum net worth requirements of Rule .0301 of 
this Subchapter. 

(b) An applicant shall immediately notify the 
Commissioner in writing of any cancellation or 
suspension of the surety bond required by Rule 
.0302 of this Subchapter. 

(c) For the purposes of this Rule, immediately 
means within three business days of discovery of 
the failure to meet the minimum net worth, and 
bonding requirements of Section .0300 of this 
Subchapter. 

(d) If an applicant fails to meet the minimum net 



888 



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September 15, 1994 



PROPOSED RULES 



worth, and surety bond requirements, the Commis- 
sioner may revoke or suspend authorization of an 
authorized lender or lender to engage in reverse 
mortgages. 

Statutory Authority G.S. 53-258(b); 53-259; 53- 
271(a). 

SECTION .0500 - DISCLOSURE 
REQUIREMENTS 



REVERSE MORTGAGE LENDER 
APPLICATION DISCLOSURE 

Authorized lenders shall disclose to the 



.0501 

(ai 

borrower all terms and conditions of the reverse 
mortgage loan in accordance with the Truth In 
Lending Act. RESPA. and Regulation Z. and any 
other applicable federal or state laws and regula- 
tions. 

(b) The items required to be disclosed by Para- 
graph (a) of this Rule may be incorporated into 
one or more forms required by State or Federal 
law, rules or regulations, or such items may be 
contained on a separate form. 

Statutory Authority G.S. 53-259; 53-260; 53-261; 
53-262; 53-264; 53-265(a); 53-267; 53-270; 53- 
271(a). 

.0502 PERMITTED FEES 

Prior to the closing of a reverse mortgage loan, 
the only charge a lender may collect from a bor- 
rower is an application fee which must be desig- 
nated as such and which may not be a percentage 
of the principal amount of the loan or amount 
financed. The fee shall be reasonable and related 
to the services to be performed. 



Statutory Authority G.S. 
271(a). 



53-259; 53-270; 53- 



SECTION - .0600 COUNSELING 

.0601 COUNSELING 

(a) An authorized lender shall provide to the 
prospective borrower at the time of the initial 
contact a list of names and addresses of counselors 
who are a pproved by the North Carolina Housing 
Finance Agency as responsible and able to provide 
information concerning reverse mortgages. 

(b) TTie counselor shall provide the authorized 
lender or lender and borrower with a certificate 
stating that the borrower has received counseling. 

Statutory Authority G.S. 53-259; 53-264; 53- 



271(a). 

SECTION .0700 - PROfflBITED ACTS 

AND PRACTICES; ENFORCEMEr«JT 

ACTIONS 

.0701 PROfflBITED ACTS 

(a) For the purposes of G.S. §53-270. the term 
"material facts" shall mean any term, fact, factor 
or condition which is likely to influence, persuade 
or induce a borrower for a reverse mortgage loan 
to take a particular action. 

(b) All lenders shall be prohibited from using or 
attaching any property or asset of the borrower, 
except the real property securing the reverse 
mortgage loan, in satisfaction of the reverse 
mortgage obligation. 



Statutory Authority 
271(a). 



G.S. 53-259; 53-270; 53- 



.0702 ENFORCEMENT ACTIONS 

The grounds upon which the Commissioner may 
either revoke or suspend authorization of a lender 
to engage in reverse mortgage loans shall include. 
but iiot be limited to the following: 
(I) The making of any false statement in an 
a pplication for authorization, if the false 
statement would have been grounds for 
denial of the a pplication; or 
The making of any false statement on any 
form or document requested by the Com- 
missioner: or 

One or more violations of the Reverse 
Mortgage Act or provisions of this Sub- 
chapter: or 

(4) The conviction of any crime which would 
have a bearing upon the fitness or ability 
of the authorized lender to conduct its 
business: or 

(5) The commission of any action which 
involves dishonesty, fraud, or misrepre- 
sentation. This Subparagraph shall not 
be construed to a pply to bona fide errors. 
The failure to pay the annual fee pursuant 
to Rule .0204 of this Subchapter. 



12} 



£3} One or 



£6} 



Statutory Authority G. S. 
271(a). 



53-259; 53-270; 53- 



.0703 HEARINGS 

All hearings conducted pursuant to this Subchap- 
ter or the Reverse Mortgage Act shall proceed in 
accordance with G.S. 150B and 4 NCAC 3B 
.0200. et seq.. The Commissioner may subpoena 



9:12 



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889 



PROPOSED RULES 



witnesses at aM such hearings. 

Statutory Authority G.S. 53-259; 53-270; 53-271. 

TITLE 10 - DEPARTMENT OF 
HUMAN RESOURCES 

Notice is hereby given in accordance with G.S. 
150B-21.2 that the Division of Facility Services 
intends to repeal rule cited as 10 NCAC 3R .0320 
and amend 3R . 2002. 

1 he proposed effective date of this action is 
December 1, 1994. 

1 he public hearing Viill be conducted at 10:30 
a.m. on October 17, 1994 at the Council Building, 
701 Barbour Drive, Room 201. Raleigh, NC. 

MXeason for Proposed Action: The State Medical 
Facilities Plan no longer projects need for home 
health services based on groupings of contiguous 
counties, \hrious opposition exists to 10 NCAC 
3R .2002 and there is no consensus on how to 
re\ise the rule to assure all home health proxiders 
have equal opportunities for expansion of existing 
home health services. 

L^omment Procedures: All written comments must 
be submitted to Jackie Sheppard, APA Coordina- 
tor, Division of Facility Services, P.O. Box 29530, 
Raleigh, NC 27626-0530 no later than October 17, 
1994. Oral comments may be made at the hear- 
ing. 

CHAPTER 3 - FACILITY SERVICES 

SUBCHAPTER 3R - CERTIHCATE 
OF NEED REGULATIONS 

SECTION .0300 - APPLICATION 
AND REVIEW PROCESS 

.0320 HOME HEALTH AGENCIES 

(a) For thos e hom e h e alth ag e noioo for which no 
c e rtificate of need ' ■ ' ■ 'os issued, th e hom e h e alth 
ag e ncy' s g e ographic s e rvic e ar e a shall b e only 
thos e countio G in which pati e nts w e r e s e rs' e d as 
shown — &fi — the — e xisting — hom e — h e alth — ag e ncy' s 
lic e nsur e r e n e v . al form on fil e with th e Lic e nsur e 
S e ction of th e Division of Facility Servic e s ao of 
January 1, 1991. 



^b) — For tho s e home health ogcncice for which a 
certificate of need was issued, the home health 
agency's — geographic — ser i 'ice — area — sbaH — fee — as 
foUov i' s: 

ft) Where the s ervice area i s identified on 

the certificate of need issued to the 
home health agency, the agency's geo - 
graphic service area s hall be the sep i 'icc 
ai=ea — identified — on the — ccrtifioate of 
need. 

Where the service area is not identified 
on the certificate of need issued to the 
home health agency, the agency's geo 



^ 



graphic s ervice area s hall be the pro 
posed geographic service area which 
V . PS identified in the application for a 
certificate of need and approved by the 
Certificate of Need Section. 



Statutory Authority G. S. 131 £-177(1); 131E-181; 
131E-185. 

SECTION .2000 - CRITEIUA AND 

CTANDARDS FOR HOME HEALTH 

SERVICES 

.2002 DEFEVmONS 

The following definitions in this Rule will apply 
to all rules in this Section: 

"Home Health Agency" means an agency 
as defined in G.S. 131E-176 (12). 
"Home Health Services" means services 
as defined in G.S. 131E-176 (12). 
" Proposed Geographic Service Area" 
meanst 
— Where the 



(1) 
(2) 
(3) 



^ 



(te)- 



proponent has proposed to 
establish a home health agency to meet 
the need projected in the applicable 
State — Medical — Facilities — Plaa — for a 
single — county, the single county in 
which the home health agency will be 
establishedfef to meet the need project- 
ed for a single county in the applicable 
State Medical Facilities Plan. 
V i Ticrc the proponent has proposed to 
establish a home health agency to meet 
the need projected in the applicable 
State — Medical — Facilities — Plaa — fef — a 



groupmg of contiguous counties, those 
contiguous counties defined in the Stat e 
Medical Facilities Plan in cff'cct at the 
beginning of the review period for the 
application and in which the proponent 
will provide home health scr i 'iccs. 



890 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



Statutory Authority G.S. 131 E-177(l); 
131E-1 83(b). 

TITLE 11 - DEPARTMENT OF 
INSURANCE 

lyiotice is hereby given in accordance with G.S. 
150B-21.2 that the N. C. Department of Insurance 
intends to amend rules cited as 11 NCAC 1 .0201 , 
.0403; repeal 11 NCAC 1 .0431; 11 NCAC 2 
.0101 and 11 NCAC HE .0303. 

I he proposed effective date of this action is 
December 1, 1994. 

Ihe public hearing will be conducted at 10:00 
a.m. on October 7, 1994 at the Dohbs Building, 
3rd Floor Hearing Room, 430 N. Salisbury Street, 
Raleigh, N C 27611. 

MXeason for Proposed Action: 

II NCAC 1 .0201 & .0403 - Technical changes. 
11 NCAC 1 .0431 & HE .0303 - Needed to 
comply with changes made during the 1994 Session 
of the General Assembly. 

11 NCAC 2 .0101 - Rule is outdated. 

L^omment Procedures: Written comments may be 
sent to Ellen Sprenkel at 430 N. Salisbury Street, 
Raleigh, N.C. 27611. Oral presentations may be 
made at the public hearing. Anyone having ques- 
tions should call Ellen Sprenkel at (919) 733-4529. 

CHAPTER 1 - DEPARTMENTAL 
RULES 

SECTION .0200 - DEPARTMENTAL 
RULES 

.0201 LOCATION OF AND 

INSPECTION OF DEPARTMENTAL 
RULES 

(a) Location of Departmental Rules. All rules 
for the Department and all codes, standards and 
rules adopted by reference are located in the 
Hearings Division Office of the Department of 
Insurance. 

(b) Inspection of Rules. Any person desiring to 
inspect the rules of the Department shall so notify 
the Deputy Commissioner of the North Carolina 
Department of Insurance in charge of the Hearings 
Division Office. 



Statutory Authority G.S. 58-2-40; 150B-21. 

SECTION .0400 - ADMINISTRATIVE 
HEARINGS 

.0403 REQUEST FOR HEARING 

(a) A request for an administrative hearing 
under 11 NCAC 1 .0401 must be in writing and 
must contain the following information: 

( 1 ) name and address of the person request- 
ing the hearing, 

(2) a concise statement of the departmental 
action being challenged, 

(3) a concise statement of the manner in 
which the petitioner is aggrieved, and 

(4) a clear and specific demand for a public 
hearing. 

(b) The request for hearing shall be filed with: 
Commissioner of Insurance, ATTENTION: 
Deputy Commissioner, Hearings Divi s ion, Office. 
N.C. Department of Insurance. Post Office Box 
26387, Raleigh, North Carolina 27611. 

Statutory Authority G.S. 58-2-40; 150B-38. 

.0431 RATEMAKBSfG PROCEDURES 
FOR RATE BUREAU FILINGS 

Hearing procedure s for rate filings made by the 
North Carolina Rate Bureau shall be governed by 
the provisions of Article 36 of G.S. 5 8 and G.S. 
150B 39 through 1 SOB 4 1. 

Statutory Authority G.S. 58-2-40(1) ; 58-36-1; 58- 
36-10; 58-36-15; 58-36-20; 58-36-70; 150B-38. 

CHAPTER 2 - SUPPORT 
SERVICES DIVISION 

SECTION .0100 - GENERAL 
PROVISIONS 

.0101 PURPOSE OF DIVISION 

The — s upport s crvicca — divi s ion — of the North 
Carolina Department of In s umncc i s e s tablished to 
provide an accurate accounting of all departmental 
expenditures under the provi s ions of the Executive 
Budget Act. — In addition, the support s ervices 
division is respon s ible for all departmental person 
ncl, in compliance with the rules and regulation s 
of the State Personnel Board, and provide s other 
miscellaneous services for the department, inelud 
ing, but not limited to, auditing and accounting for 
the State Fireman' s Relief Fund, and licensing and 
accounting — fef — lightning — t=ed — salespersons — and 
companies in the s tate. 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



891 



PROPOSED RULES 



Statutory Authority G.S. 58-9; 143-1 to 143-34.4; 
128-1 to 128-4; 105-59. 



SECnON .0300 - RULES AND 
INTERPRETATIONS 



.0303 



CHAPTER 11 - FINANCIAL 
EVALUATION DIVISION 

SUBCHAPTER HE - TAX 
AND STATISTICAL 

SECTION .0300 - LIFE: 
GENERAL NATURE 

PREMIUM TAXES ON 
ANNUITIES 



Ever)' life insurer, in computing its premium 
taxe s on gros s premiums, after giving due con s id 
cmtion to tiic exemptions as 9 p > ecified in G.S. 
105 22 8 .5, may pay premium taxe s on premiums 
for the purchase of armuitie s at such time as the 

contract holder elects to commence amiuity bene 

fi fq 

TxnfT 

Statutory Authority G.S. 105-228.5. 



ISotice is hereby given in accordance with G.S. 
150B-21.2 that the N.C. Department of Insurance 
intends to adopt rule cited as 11 NCAC 10 .0313. 

1 he proposed effective date of this action is 
December 1, 1994. 

1 he public hearing will be conducted at 10:00 
a.m. on October 7, 1994 at the Dobbs Building, 
3rd Floor Hearing Room, 430 N. Salisbury Street, 
Raleigh, N.C. 27611. 

ixeason for Proposed Action: To comply with 
changes made during the 1994 Session of the 
General Assembly. 

{comment Procedures: V&itten comments may be 
sent to Charles Swindell at 430 N. Salisbury 
Street, Raleigh, N.C. 27611. Oral presentations 
may be made at the public hearing. Anyone 
having questions should call Charles Swindell at 
(919) 733-3368. or Ellen Sprenkel at (919) 733- 
4529. 

CHAPTER 10 - PROPERTY AND 
CASUALTY DIVISION 



.0313 ENDORSEMENTS TO BUREAU 
RESIDENTIAL PROGRAMS 

£a} For the purposes of OS^ 58-41-10(a'). a 
"residential risk" is a risk covered under any of 
the following North Carolina Rate Bureau residen- 
tial programs: Homeowners Program. Dwelling 
Fire and Extended Coverage Program, Mobile 
Home Owner (C) Program, and Mobile-Homeown- 
ers {¥) Program. 

(b) When an insurance company, joint under- 
writing association, advisory organization, or 
rating organization files an endorsement to attach 
to a North Carolina Rate Bureau residential pro- 
gram, which endorsement provides coverage that 
is not subject to the jurisdiction of the Bureau and 
is exempt from Article 41 of Chapter 58 of the 
General Statutes by virtue of G.S. 58-41 -lOCa), the 
filing entity shall: 

(1) provide a copy of the filing to the 
North Carolina Rate Bureau; 
utilize a statistical code for reporting 
premiums and losses and advise on 
what line on page 14 of the annual 
statement this data will be reported: 
complete a forms questionnaire: and 
submit the rates separately without a 
rate questionnaire. 



Ql 



13} 
14} 



Statutory Authority G.S. 58-2-40; 58-3-150; 58-40- 
30. 

****************** 

ISotice is hereby given in accordance with G.S. 
1503-21. 2 that the N. C. Department of Insurance 
intends to adopt rules cited as 11 NCAC 1 IF .0301 
- .0308. 

1 he proposed effective date of this action is 
December 1, 1994. 

1 he public hearing will be conducted at 10:00 
a.m. on October 7, 1994 at the Dobbs Building, 
3rd Floor Hearing Room, 430 N. Salisbury Street, 
Raleigh, N.C. 27611. 

iXeason for Proposed Action: To acquire state 
accreditation and assure that a company's assets 
match their liabilities. 



892 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



(comment Procedures: Written comments may be 
sent to Witter James at 430 N. Salisbury St., 
Raleigh, N.C. 27611. Oral presentations may be 
made at the public hearing. Anyone having ques- 
tions should call Wblter James at (919) 733-3284 
or Ellen Sprenkel at (919) 733-4529. 



CHAPTER 11 



FINANCIAL EVALUATION 
DIVISION 



SUBCHAPTER IIF - ACTUARIAL 

SECTION .0300 - ACTUARIAL OPINION 
AND MEMORANDUM 

.0301 APPLICABILITY AND SCOPE 

(a) This Section applies to aU life insurance 
companies and fraternal benefit societies doing 
business in this State and to all life insurance 
companies and fraternal benefit societies that are 
authorized to reinsure life insurance, annuities, or 
accident and health insurance business in this 
State. All cross references to rule numbers are to 
rules within this Section. 

(b) This Section a pplies to all annual statements 
filed with the Commissioner after December 31. 
1994. Except for companies that are exempt under 
Rule .0304 of this Section, a statement of opinion 
on the adequacy of the reserves and related actuar- 
ial items based on an asset adequacy analysis in 
accordance with Rule .0306 of this Section and a 
su pporting memorandum in accordance with Rule 
■0307 of this Section are required each year. Any 
company so exempted must file an opinion under 
Rule .0305 of this Section. 

(c) The Commissioner may require any company 
otherwise exempt under this Section to submit an 
opinion and to prepare a supporting memorandum 
in accordance with Rules .0306 and .0307 of this 
Section if an asset adequacy analysis for the 
company is necessary because of the financial 
condition of the company. 

Statutory Authority G.S. 58-2-40; 
58-58-50(i); 58-58-50(j). 



58-24-120; 



.0302 DEFINITIONS 

(a) "Annual statement" means that statement 
required to be filed each year under G.S. 
58-2-165. 

(b) "Appointed actuary" means any individual 
who is appointed or retained in accordance with 
Rule .0303(c) of this Section to provide the 
actuarial opinion and su pporting memorandum as 



required by G.S. 58-58-50(1) and this Section. 

(c) "Asset adequacy analysis" means an analysis 
that meets the standards and other requirements 
referred to in Rule .0303(d) of this Section; and 
includes cash flow testing, sensitivity testing, or 
applications of risk theory. 

(d) "Board" means the Actuarial Standards 
Board established by the American Academy of 
Actuaries to develop and promulgate standards of 
actuarial practice; and its successors. 

(e) "Company" means a life insurance company, 
fraternal benefit society, or reinsurer subject to 
this Section. 

(f) "Non-investment grade bonds" are those 
designated as medium to lower quality by the 
NAIC Securities Valuation Office^ 

(g) "Opinion" means: 

£1} For Rules .0306. .0307. or .0308 of 
this Section, the statement of actuarial 
opinion of an appointed actuary regard- 
ing the adequacy of the reserves and 
related actuarial items based on an asset 
adequacy test in accordance with Rule 
.0306 of this Section and with presently 
accepted actuarial standards; 
(21 For Rule .0305 of this Section, the 
statement of actuarial opinion of an 
appointed actuary regarding the calcula- 
tion of reserves and related items, in 
accordance with Rule .0305 of this 
Section and with those presently accept- 
ed actuarial standards that specifically 
relate to this opinion, 
(h) "Qualified actuary" means any individual 

who meets the requirements set forth in Rule 

.030303) of this Section. 

Statutory Authority G.S. 58-2-40; 58-24-120; 
58-58-50(i); 58-58-500). 

.0303 GENERAL REQUIREMENTS 

(a) Submission of Opinion: 
(1) There shall be included on or attached 
to page l_ of the annual statement for 
each year beginning with calendar year 



1994, the statement of an appointed 
actuary, entitled "Statement of Actuarial 
Opinion." setting forth an opinion 
relating to reserves and related actuarial 
items held in support of policies and 
contracts, in accordance with Rule 
.0306 of this Section; provided, howev- 
er, that any company exempted under 
Rule .0304 of this Section from submit- 
ting an opinion in accordance with Rule 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



893 



PROPOSED RULES 



■0306 of this Section shall include on or 
attach to page i of the annual statement 
an opinion rendered by an appointed 
actuary in accordance with Rule .0305 
of this Section. 

(2) If in the previous year a company 
provided an opinion in accordance with 
Rule .0305 of this Section, and in the 
current year fails the exemption criteria 
of Rules .0304(c)(1). .0304(c)(2). or 
.0305(c)(5) of this Section to again 
provide an opinion in accordance with 
Rule .0305 of this Section, the opinion 
in accordance with Rule .0306 of this 
Section shall not be required until 
August i following the date of the 
annual statement. In this instance, the 
company shall provide an opinion in 
accordance with Rule .0305 of this 
Section with appropriate qualification 
noting the intent to subsequently pro- 
vide an opinion in accordance with 
Rule .0306 of this Section. 

(3) Upon written request by the company. 
the Commissioner may grant a 45 -day 
extension of the date for submission of 
the opinion. 

(b) A "qualified actuary" is an individual who: 

(1) Is a member in good standing of the 
American Academy of Actuaries; 

(2) Is qualified to sign opinions for life and 
health insurance company annual state- 
ments in accordance with the American 
Academy of Actuaries qualification 
standards for actuaries signing such 
opinions; 

£3} Is familiar with the valuation require- 
ments applicable to life and health 
insurance companies; 

(4) Has not been found by the Commission- 
er {or if so found has subsequently been 
reinstated as a qualified actuary), to 
have: 

(A) Violated any provision of. or any 
obligation imposed by. any law or 
rule in the course of his or her deal- 
ings as a qualified actuary; 

(B) Been found by a court of competent 
jurisdiction to be guilty of a fraudu- 
lent or dishonest practice; 

(C) Demonstrated his or her incompeten- 
cy, lack of cooperation, or untrust- 
worthiness to act as a qualified actu- 
ary; 

(D) Submitted to the Commissioner during 



the past five years, under this Section, 
an opinion or memorandum that the 
Commissioner rejected because it did 
not meet the provisions of this Sec- 
tion, including standards set by the 
Board; or 
(E) Resigned or been removed as ^ 
actuary within the past five years as a 
result of acts or omissions indicated in 
any adverse report on an examination 
or as a result of failure to adhere to 
generally acceptable actuarial stan- 
dards; and 
(5) Has not failed to notify the Commis- 
sioner of any action taken by any insur- 
ance regulator of any other state similar 
to that under Subparagraph (b)(4) of 
this Rule. 

(c) An "appointed actuary" is a qualified actuary 
who is a ppointed or retained to prepare the opinion 
required by this Section; either directly by or by 
the authority of the board of directors through an 
executive oflicer of the company. The company 
shall, within 45 days after the date of the appoint- 
ment, give the Commissioner written notice of the 
name, title (and, in the case of a consulting actu- 
ary, the name of the firm), and manner of a ppoint- 
ment or retention of each person a ppointed or 
retained by the company as an appointed actuary 
and shall state in such notice that the person meets 
the requirements of Paragraph (h) of this Rule- 
Once notice is furnished, no further notice is 
required for the actuary, provided that the compa- 
ny gives the Commissioner written notice if the 
actuary ceases to be appointed or retained as an 
a ppointed actuary or no longer meets the require- 
ments of Paragraph (h) of this Rule. If any person 
a ppointed or retained as an appointed actuary 
replaces a previously a ppointed actuary, the notice 
shall so state and give the reasons for replacement. 

(d) The asset adequacy analysis required by this 
Section: 

(1) Shall conform to the standards of prac- 
tice as promulgated from time to time 
by the Board and on any additional 
standards under this Section, which 
standards are to form the basis of the 
opinion in accordance with Rule .0306 
of this Section; and 

(2) Shall be based on methods of analysis 
that are deemed to be appropriate for 
such purposes by the Board. 

(e) Liabilities to be Covered: 

(1) The opinion shall apply to all in force 
business on the annual statement date 



894 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



regardless of when or where issued, 
e.g.. reserves of Exhibits 8^ 9 and 10. 
and claim liabilities in Exhibit 11. Part 
I and equivalent items in the separate 
account statement or statements. 

(2) If the appointed actuary determines as 
the result of asset adequacy analysis 
that a reserve should be held in addition 
to the aggregate reserve held by the 
company and calculated in accordance 
with methods set forth in G.S. 
58-58-50(d). 58-58-50(d-n. 
58-58-50(g'). 58-58-50(h). and 
58-58-50(k). the company shall 
establish such additional reserve. 

(3) For years ending before December 31. 
1996, the company may, m lieu of 
establishing the ftUl amount of the 
additional reserve in the annual 
statement for that year, set up an 
additional reserve in an amoun t not less 
than the following: 

(A) December 31. 1994. the additional 
reserve divided by three. 

(B) December 31. 1995. two times the 
additional reserve divided by three. 

(4) Additional reserves established under 
Subparagraph (e)(2) or (e)(3) of this 
Rule and deemed to be unnecessary in 
later years may be released. Any 
amounts released must be disclosed in 
the opinion for the applicable year. 
The release of such reserves are not 
deemed to be an adoption of a lower 
standard of valuation. 

Statutory Authority G.S. 58-2-40; 58-58-50(1); 
58-58-50(j). 

.0304 REQUIRED OPINIONS 

(a) The opinion submitted under G.S. 



S8-58-50(i) shall be in accordance with the 
applicable provisions in this Rule. 

(b) For purposes of this Rule, companies are 
classified as follows, based on the admitted assets 
as of the end of the calendar year for which the 
actuarial opinion is applicable: 

(1) Category A comprises companies whose 
admitted assets do not exceed twenty 
million dollars ($20.(XX).(XX)). 

(2) Category B comprises companies whose 
admitted assets exceed twenty million 
dollars ($20.000.(KX)) but do not exceed 
one hundred million dollars 
($100.(X)0.(XX)). 



(3) Category C comprises companies whose 
admitted assets exceed one hundred 
million dollars ($1(X).(XX).000) but do 
not exceed five hundred million dollars 
($5(X).(XX).0(X)). 

(4) Category D comprises companies 
whose admitted assets exceed five 
hundred million dollars ($500.000.(XX)). 

(c) Exemption Eligibility Tests: 

(1) Any Category A company that, for any 
year beginning with calendar year 
1994. meets all of the following criteria 
is eligible for exemption from submis- 
sion of an opinion in accordance with 
Rule .0306 of this Section for the year 
in which these criteria are met. The 
ratios in Parts (c)(1)(A). (c)(1)(B). and 
(c)(1)(C) of this Rule shall be calculated 
based on amounts as of the end of the 
calendar year for which the opinion is 
a pplicable. 

(A) The ratio of the sum of capital and 
surplus to the sum of cash and invest- 
ed assets is at least equal to .10. 

(B) The ratio of the sum of the reserves 
and liabilities for annuities and depos- 
ite to the total admitted assets is less 
than .30. 

(C) The ratio of the book value of the 
non-investment grade bonds to the 
sum of capital and surplus is less than 
.50. 

(D) The Examiner Team for the NAIC 
has not designated the company as a 
first priority company in any of the 
two calendar years preceding the 
calendar year for which the opinion is 
a pplicable, or a second priority com- 
pany in each of the two calendar 
years preceding the calendar year for 
which the opinion is a pplicable: or the 
company has resolved the first or 
second priority status to the satisfac- 
tion of the insurance regulator of the 
company's state of domicile and that 
regulator has so notified the chair of 
the NAIC Life and Health Actuarial 
Task Force and the NAIC StafF and 
Su pport Office. 

(2) Any Category B company that, for any 
year beginning with calendar year 
1994. meets all of the following criteria 
shall be eligible for exemption from 
submission of an opinion in accordance 
with Rule .0306 of this Section for the 



9:12 



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September 15, 1994 



895 



PROPOSED RULES 



year in which the criteria are met. The 
ratios in Parts (c)(2)(A), (c)(2)(B), and 
(c)(2)(C) of this Rule shall be calculated 
based on amounts as of the end of the 
calendar year for which the opinion js 
applicable. 

(A) The ratio of the sum of capital and 
surplus to the sum of cash and invest- 
ed assets is at least equal to .07. 

(B) The ratio of the sum of the reserves 
and liabilities for annuities and depos- 
its to the total admitted assets is less 
than .40. 

(C) The ratio of the book value of the 
non-investment grade bonds to the 
sum of capital and surplus is less than 
.50. 

(D) The Examiner Team for the NAIC 
has not designated the company as a 
first priority company in any of the 
two calendar years preceding the 
calendar year for which the opinio n is 
applicable, or a second priority com- 
pany in each of the two calendar 
years preceding the calendar year for 
which the opinion is applicable; or the 
company has resolved the first or 
second priority status to the satisfac- 
tion of the insurance regulator of the 
company's state of domicile and that 
regulator has so notified the chair of 
the NAIC Life and Health Actuarial 
Task Force and the NAIC Staff and 
Support Office. 

(J) Any Category A or Category B compa- 
ny that megts all of the criteria set forth 
in Subparagraphs (c)(n and (c)(2) of 
this Rule, whichever is applicable, is 
exempt from having to submit an opin- 
ion under Rule .0306 of this Section 
unless the Commissioner specifically 
indicates to the company that the ex- 
emption is not to be taken. 

(A) Any Category A or Category B compa- 
ny that, for any year beginning with 
calendar year 1994, is not exempt 
under Subparagraph (c)(3) of this Rule 
shall submit an opinion in accordance 
with Rule .0306 of this Section for the 
year for which it is not exempt. 

(5) Any Category C company that, after 
submitting an opinion in accordance 
with Rule .0306 of this Section, meets 
all of the following criteria, shall not be 
required, unless required in accordance 



with Subparagraph (c)(6) of this Rule. 
to submit an opinion in accordance with 
Rule .0306 of this Section more fre- 
quently than every third year. Any 
Category C company that fails to meet 
all of the following criteria for any year 
shall submit an opinion in accordance 
with Rule .0306 of this Section for that 
year. The ratios in Parts (c)(5)(A), 
(c)(5)(B). and (c)(5)(C) of this Rule 
shall be calculated based on amounts as 
of the end of the calendar year for 



which the opinion is a pplicable. 

(A) The ratio of the sum of capital and 
surplus to tlie sum of cash and invest- 
ed assets is at least equal to .05. 

(B) The ratio of the sum of the reserves 
and liabilities for annuities and depos- 
its to the total admitted assets is less 
than .50. 

(C) The ratio of the book value of the 
non-investment grade bonds to the 
sum of the capital and surplus is less 
than .50. 

CD) The Examiner Team for the NAIC 
has not designated the company as a 
first priority company in any of the 
two calendar years preceding the 
calendar year for which the opinion is 
applicable, or a second priority com- 
pany in each of the two calendar 
years preceding the calendar year for 
which the opinion is applicable, or the 
company has resolved the first or 
second priority status to the satisfac- 
tion of the insurance regulator of the 
company's state of domicile and that 
regulator has so notified the chair of 
the NAIC Life and Health Actuarial 
Task Force and the NAIC Staff and 
Support Office- 
rs) Any company that is not required by 
this Rule to submit an opinion in accor- 
dance with Rule .0306 of this Section 
for any year shall submit an opinion in 
accordance with Rule .0305 of this 
Section for that year unless, as provid- 
ed for by Rule .0301 of this Section, 
the Commissioner requires an opinion 
in accordance with Rule .0306 of this 
Section, 
(d) Every Category D company shall submit an 
opinion in accordance with Rule .0306 of this 
Section for each year, beginning with calendar 
year 1994. 



896 



9:12 



NORTH CAROUNA REGISTER 



September 15, 1994 



PROPOSED RULES 



Statutory Authority G.S. 58-2-40; 58-58-50(i); 
58-58-500). 

.0305 OPINION WITHOUT ASSET ADEQUACY ANALYSIS 

(a) The opinion required by G.S. 58-58-50(i) shall comprise: 

(1) a paragraph identifying the a ppointed actuary and his or her qualifications. 

(2) a regulatory authority paragraph stating that the company is exempt under this Section from 
submitting an opinion based on an asset adequacy analysis and that the opinion, which is not based 
on an asset adequacy analysis, js rendered in accordance with this Rule. 

(3) a scope paragraph identifying the subjects on which the opinion is to be expressed and describing 
the scope of the appointed actuary's work. 

(4) an opinion paragraph expressing the a ppointed actuary's opinion as required b^; G.S. 58-58-50(i). 

(b) The following language provided is that which in typical circumstances would be included in an opinion 
in accordance with this Section. The language may be modified as needed to meet the circumstances of a 
particular case, but the a ppointed actuary shall use language that clearly expresses his or her professional 
judgment. However, in any event the opinion shall retain all pertinent aspects of the language provided ]n 
this Rule. 

(1) The opening paragraph shall indicate the appointed actuary's relationship to the company. 

(A) For a company actuary, the opening paragraph of the actuarial opinion shall read as follows: 
"I. [name of actuarvl. am ftitlel of [name of company] and a member of the American 
Academy of Actuaries. I was appointed by. or by the authority of. the Board of Directors of 
the insurer to render this opinion as stated in the letter to the Commissioner dated [insert 
datel. I meet the Academy qualification standards for rendering the opinion and am familiar 
with the yaluation requirements a pplicable to Hfe and health companies." 

(B) For a consulting actuary, the opening paragraph of the actuarial opinion shall contain a sentence 
such as: 

"I. [name and title of actuarvl. a member of the American Academy of Actuaries, am 
associated with the firm of [insert name of consulting firml. I have been appointed by. or by 
the authority of. the Board of Directors of [name of company] to render this opinion as stated 
in the letter to the Commissioner dated [insert datel. I meet the Academy qualification 
standards for rendering the opinion and am familiar with the valuation requirements 
a pplicable to life and health insurance companies." 

(2) The regulatory authority paragraph shall include a statement such as the following: 

"Said company is exempt under Rule [insert designation] of the [name of state] Insurance 
Department from submitting a statement of actuarial opinion based on an asset adequacy 
analysis. This opinion, which is not based on an asset adequacy analysis, is rendered in 
accordance with 11 NCAC IIF .0305. 

(3) The scope paragraph shall contain a sentence such as the following: 

^ have examined the actuarial assumptions and actuarial methods used in determining 
reserves and related actuarial items listed below, as shown in the annual statement of the 
company, as prepared for filing with state regulatory officials, as of December 31. [year]." 
The scope paragraph shall list items and amounts with respect to which the appointed actuary is 
expressing an opinion. The list shall include: 

(A) Aggregate reserve and deposit funds for policies and contracts included in Exhibit 8; 

(B) Aggregate reserve and deposit fund s for policies and contracts included in Exhibit 9; 

(C) Deposit funds, premiums, dividend and coupon accumulations and su pplementary contracts not 
involving life contingencies included in Exhibit 10; and 

£D} Policy and contract claims-liability end of current year included in Exhibit 11. Part I. 

(4) If the appointed actuary has examined the underlying records, the scope paragraph shall also 
include the following: 

"My examination included such review of the actuarial assumptions and actuarial methods and 
of the underlying basic records and such tests of the actuarial calculations as I considered 
necessary. " 

(5) If the appointed actuary has not examined the underlying records, but has relied upon listings and 
summaries of policies in force prepared by the company or a third party, the scope paragraph shall 



9:12 NORTH CAROLINA REGISTER September 15, 1994 897 



PROPOSED RULES 



include a sentence such as one of the following: 

(A) "I have relied upon listings and summaries of policies and contracts and other Habilities in 
force prepared by [name and title of company officer certifying in force records! as certified 
in the attached statement. (See accompanying affidavit by a company officer.) In other 
respects my examination included review of the actuarial assumptions and actuarial methods 
and such tests of the actuarial calculations as I considered necessary. " or 

(B) '_!l have relied upon [name of accounting firm] for the substantial accuracy of the in force 
records inventory and information concerning other liabilities, as certified in the attached 
statement. In other respects my examination included review of the actuarial assumptions 
and actuarial methods and such tests of the actuarial calculations as I considered necessary." 

The statement of the person certifying shall follow the form indicated by Subparagraph rb)(10) of 
this Rule. 

(6) The opinion paragraph shall include the following: 

"In my opinion the amounts carried in the balance sheet on account of the actuarial items 
identified above: 

1. Are computed in accordance with those presently accepted actuarial standards that 
specifically relate to the opinion required under this Section; 

2. Are based on actuarial assumptions that produce reserves at least as great as those called 
for in any contract provision as to reserve basis and method, and are in accordance with all 
other contract provisions; 

3. Meet the requirements of the Insurance Law and regulations of tlie state of [state of 
domicile] and are at least as great as the minimum aggregate amounts required by the state 
in which this statement is filed. 

4. Are computed on the basis of assumptions consistent with those used in computing the 
corresponding items in the annual statement of the preceding year-end with any exceptions 
as noted below; and 

5. Include provision for all actuarial reserves and related statement items that ought to be 
established. 

The actuarial methods, considerations and analyses used in forming my opinion conform to 
the a ppropriate compliance guidelines as promulgated by the Actuarial Standards Board, 
which guidelines form the basis of this statement of opinion." 

(7) The concluding paragraph shall document the eligibility for the company to provide an opinion as 
provided by this Rule. It shall include the following: 

"This opinion is provided in accordance with 11 NCAC IIF .0305. As such it does not include 
an opinion regarding the adequacy of reserves and related actuarial items when considered 
in light of the assets that su pport them. Eligibility of H NCAC IIF .0305 is confirmed as 
follows: 

1. The ratio of the sum of capital and surplus to tlie sum of cash and invested assets is 
[amount], which equals or exceeds the applicable criteria based on the admitted assets of the 
company (11 NCAC IIF .0304(c)). 

2. The ratio of tlie sum of the reserves and liabilities for annuities and deposits to the total 
admitted assets is [amount] . which is less than the applicable criteria based on the admitted 
assets of the company (11 NCAC UF .0304(c)). 

3. The ratio of the book value of the non-investment grade bonds to Uie sum of capital and 
surplus is [amount], which is less than the a pplicable criteria of .50. 

4. To my knowledge, no NAIC Examiner Team has designated the company as a first priority 
company in any of tlie two calendar years preceding the calendar year for which the 
actuarial opinion is applicable, or a second priority company in each of tjie two calendar 
years preceding the calendar year for which the actuarial opinion is a pplicable or the 
company has resolved the first or second priority status to tJie satisfaction of the insurance 
regulator of the state of t]ie company's domicile. 

5. To my knowledge there is not a specific request from any insurance regulator requiring an 
asset adequacy anal\sis opinion. 



898 9:12 NORTH CAROLINA REGISTER September 15, 1994 



PROPOSED RULES 



Signature of A ppointed Actuary 



Address of A ppointed Actuary 



Telephone Number of A ppointed Actuary" 

(8) If there has been any change in the actuarial assumptions from those previously employed, that 
change shall be described in the annual statement or in a paragraph of the opinion, and the 
reference in Part (b)(6)('D) of this Rule to consistency should read as follows: 
" ... with the exception of the change described on Page Fnumberl of the annual statement (or 
in the preceding paragraph)." 

The adoption for new issues or new claims or other new liabilities of an actuarial assumption that 
differs from a corresponding assumption used for prior new issues or new claims or other new 
liabilities is not a change in actuarial assumptions within the meaning of this Paragraph. 

£9} If the appointed actuary is unable to form an opinion, he or she shall refuse to issue an opinion. 
If the appointed actuary's opinion is adverse or qualified, he or she shall issue an adverse or 
qualified actuarial opinion explicitly stating the reason or reasons for such opinion. This statement 
shall follow the scope paragraph and precede the opinion paragraph . 

(10) If the appointed actuary does not express an opinion as to the accuracy and completeness of the 
listings and summaries of policies in force, there shall be attached to the opinion the statement of 
a company officer or accounting firm who prepared such underlying data similar to the following: 
^ fname of officerl. [title] of [name and address of company or accounting firml. hereby 
affirm that the listings and summaries of policies and contracts in force as of December 31. 
[yearl. prepared for and submitted to [name of a ppointed actuary], were prepared under my 
direction and, to the best of my knowledge and belief, are substantially accurate and complete. 



Signature of the Officer of the Company 
or Accounting Firm 



Address of the Officer of the Company 
or Accounting Firm 



Telephone Number of the Officer of the 
Company or Accounting Firm" 

Statutory Authority G.S. 58-2-40; 58-58-50(1); 58-58-50(j). 

.0306 OPINION BASED ON ASSET ADEQUACY ANALYSIS 

(a) The opinion submitted in accordance with this Rule shall comprise: 

(1) A paragraph identifying the appointed actuary and his or her qualifications as prescribed by 
Subparagraph (b)(1) of this Rule; 

(2) A scope paragraph identifying the subjects on which an opinion is to be expressed and describing 
the scope of the appointed actuary's work, including a tabulation delineating the reserves and 
related actuarial items that have been analyzed for asset adequacy and the method of analysis, as 
prescribed by Subparagraph (b)(2) of this Rule and identifying the reserves and related actuarial 
items covered by the opinion that have not been so analyzed; 

(3) A reliance paragrap h describing those areas, if any, where the appointed actuary has deferred to 
other experts in developing data, procedures or assumptions, (e. g. . anticipated cash flows from 



9:12 NORTH CAROLINA REGISTER September 15, 1994 899 



PROPOSED RULES 



currently owned assets, including variation in cash flows according to economic scenarios as 
prescribed by Subparagraph (b)(3) of this Rule, supported by a statement of each such expert jn 
the form prescribed by Paragraph (e) of this Rule: and 

(4) An opinion paragraph expressing the appointed actuary's opinion with respect to the adequacy of 
the supporting assets to mature the liabilities as prescribed by Subparagraph (b)(6) of this Rule; 

(5) One or more additional paragraphs will be needed in individual company cases if the appointed 
actuary: 

(A) Considers it necessary to state a qualification of his or her opinion; 

(B) Must disclose the method of aggregation for reserves of different products or lines of business 
for asset adequacy analysis; 

(C) Must disclose reliance upon any portion of the assets supporting the Asset Valuation Reserve 
(AVR), Interest Maintenance Reserve (IMR) or other mandatory or voluntary statement of 
reserves for asset adequacy analysis. 

(D) Must disclose an inconsistency in the method of analysis or basis of asset allocation used at the 
prior opinion date with that used for this opinion. 

(E) Must disclose whether additional reserves of the prior opinion date are released as of this opinion 
date, and the extent of the release. 

(F) Chooses to add a paragraph briefly describing the assumptions that form the basis for the actuarial 
opinion. 

(b) The following paragraphs are to be included in the opinion in accordance with this Rule. Language is 
that which in typical circumstances shall be included in an opinion. The language may be modified as needed 
to meet the circumstances of a particular ca.se. but the appointed actuary shall use language that clearly 
expresses his or her professional judgement. However, m any event the opinion shall retain all pertinent 
aspects of the language provided in this Section. 

(1) The opening paragraph shall generally indicate the appointed actuary's relationship to the company 
and his or her qualifications to sign the opinion. 

(A) For a company actuary, the opening paragraph of the actuarial opinion shall read as follows: 

^ [namel. am ftitlel of [insurance company name] and a member of the American Academy 
of Actuaries. I was appointed byj or by the authority of. the Board of Directors of the insurer 
to render this opinion as stated in the letter to the commissioner dated finsert datel. I meet 
the Academy qualification standards for rendering the opinion and am familiar with the 
valuation requirements a pplicable to Hfe and health insurance companies." 

(B) For a consulting actuary, the opening paragraph shall contain a sentence such as: 

"I. [namel. a member of the American Academy of Actuaries, am associated with the firm of 
[name of consulting firm]. I have been a ppointed by^ or by the authority of. the Board of 
Directors of [name of company] to render this opinion as stated in the letter to the 
Commissioner dated [insert datel. I meet the Academy qualification standards for rendering 
the o pinion and am familiar with the valuation requirements a pplicable to life and health 
insurance companies." 

(2) The scope paragraph shall include a statement such as the following: 

^ have examined the actuarial assumptions and actuarial methods used in determining 
reserves and related actuarial items listed below, as shown jji the annual statement of the 
company, as prepared for filing with state regulatory officials, as of December 31. [vearl. 
Tabulated below are those reserves and related actuarial items that have been subjected to 
asset adequacy analysis. 

(Include the Asset Adequacy Tested Amounts Reserve and Liability Table listed in the NAIC Model 
Regulation titled. "Actuarial Opinion and Memorandum Regulation." and any subsequent 
amendments and editions. A copy of the Table may be obtained from the North Carolina 
Department of Insurance at a cost prescribed in G.S. 58-6-5(3)). 

(3) If the appointed actuary has relied on other experts to develop certain piortions of the analysis, the 
reliance paragraph shall include a statement such as one of the following: 

(A) "I have relied on [namel. [titlel for [e.g.. anticipated cash flows from currently owned assets, 
including variations in cash flows according to economic scenarios] and, as certified in the 
attached statement....", or 

(B) ]1 have relied on personnel as cited in the su pporting memorandum for certain critical 



900 9:12 NORTH CAROLINA REGISTER September 15, 1994 



PROPOSED RULES 



aspects of the analysis in reference to the accompanying statement." 
Such a statement of reliance on other experts shall be accompanied by a statement by each of such 
experts of the form prescribed by Paragraph (e) of this Rule. 

(4) If the a ppointed actuary has examined the underlying asset and liability records, the reliance 
paragraph shall also include the following: 

"My examination included such review of the actuarial assumptions and actuarial methods and 
of the underlying basic asset and liability records and such tests of the actuarial calculations 
as I considered necessary. " 

(5) If the appointed actuary has not examined the underlying records, but has relied upon listings and 
summaries of policies in force or asset records prepared by the company or a third party, the 
reliance paragraph shall include a sentence such as one of the following: 

(A) ^ have relied upon listings and summaries [of policies and contracts, of asset records! 
prepared by [name and title of company officer certifying in-force records! as certified m 
the attached statement. In other respects my examination included such review of the 
actuarial assumptions and actuarial methods and such tests of the actuarial calculations as 
I considered necessary.", or 

(B) "I have relied upon [name of accounting firm! for the substantial accuracy of the in-force 
records inventory and information concerning other liabilities, as certified in the attached 
statement. In other respects my examination included review of the actuarial assumptions 
and actuarial methods and tests of the actuarial calculations as I considered necessary. " 

Such a sentence must be accompanied by a statement by each person relied upon of the form 
prescribed by Paragraph (e) of this Rule. 

(6) The opinion paragraph shall include the following: 

(A) "In my opinion the reserves and related actuarial values concerning the statement items 
identified above: 

1. Are computed in accordance with presently accepted actuarial standards consistently 
a pplied and are fairly stated, in accordance with sound actuarial principles; 

2. Are based on actuarial assumptions that produce reserves at least as great as those called 
for in any contract provision as to reserve basis and method, and are iji accordance with 
all other contract provisions; 

3. Meet the requirements of the insurance laws and rules of the state of [state of domicile! 
and are at least as great as tlie minimum a ggregate amounts required bj^ the state iji 
which this statement is filed; 

4. Are computed on the basis of assumptions consistent with those used in computing the 
corresponding items in the annual statement of Uie preceding year-end (with any 
exceptions noted below); 

5. Include provision for all actuarial reserves and related statement items that ought to be 
established. 

The reserves and related items, when considered in light of the assets held by the 
company with respect to such reserves and related actuarial items including, but not 
limited to. the investments earnings on such assets, and the considerations anticipated 
to be received and retained under such policies and contracts, make adequate provision, 
according to presently accepted actuarial standards of practice, for the anticipated cash 
flows required by the contractual obligations and related expenses of the company. 
The actuarial methods, considerations and analyses used in forming my opinion conform 
to the appropriate Standards of Practice as promulgated by the Actuarial Standards 
Board, which standards form the basis of this statement of opinion. 

(B) Select one of the following two paragraphs: 

iii This opinion is updated annually as required by law. To the best of mj: knowledge. 

there have been no material changes from the applicable date of the annual statement 

to the date of the rendering of this opinion that should be considered in reviewing this 

opinion, or 
(ii) The following material change(s) that occurred between the date of tlie statement for 

which this opinion is a pplicable and the date of this opinion should be considered in 

reviewing this opinion. (Describe the change or changes.) 



9:12 NORTH CAROLINA REGISTER September 15, 1994 901 



PROPOSED RULES 



The effect of unanticipated events after the date of this opinion is beyond the scope of this 
opinion. The analysis of asset adequacy portion of this opinion should be viewed recognizing 
that the company's future experience may not follow all the assumptions used in the analysis. 



Signature of A ppointed Actuary 



Address of A ppointed Actuary 



Telephone Number of A ppointed Actuary" 

(c) The adoption for new issues or new claims or other new liabilities of an actuarial assumption that differs 
from a corresponding assumption used for prior new issues or new claims or other new liabilities is not a 
change in actuarial assumptions within the meaning of this Rule. 

(d) If the a ppointed actuary is unable to form an opinion, then he or she shall refuse to issue an opinion. 
If the appointed actuary's opinion is adverse or qualified, then he or she shall issue an adverse or qualified 
opinion explicitly stating the reason or reasons for such opinion. This statement shall follow the scope 
paragraph and precede the opinion paragraph . 

(e) If the appointed actuary does not express an opinion as to the accuracy and completeness of the listings 
and summaries of policies in force or asset oriented information, there shall be attached to the opinion the 
statement of a company officer or accounting firm officer who prepared such underlying data similar to the 
following: 

^ [name of officer] . [titlel, of [name of company or accounting firm], hereby affirm that the 
listings and summaries of policies and contracts in force as of December 31. [yearl. and other 
liabilities prepared for and submitted to [name of a ppointed actuary] were prepared under 
my direction and, to the best of my knowledge and belief, are substantially accurate and 
complete. 



Signature of the officer of the Company 
or Accounting Firm 



Address of the Officer of the Company 
or Accounting Firm 



Telephone Number of the officer of the 
Company or Accounting Firm" 



or 



"I. [name of officer], [title] of [name of company, accounting firm, or security analyst], 
hereby affirm that the listings, summaries and analyses relating to data prepared for and 
submitted to [name of appointed actuary] in su pport of the asset-oriented aspects of the 
opinion were prepared under my direction and, to the best of my knowledge and belief, are 
substantially accurate and complete. 



Signature of the Officer of jthe Company. 
Accounting Firm or the Security Analyst 



902 9:12 NORTH CAROLINA REGISTER September 15, 1994 



PROPOSED RULES 



Address of the Officer of the Company. 
Accounting Firm or the Security Analyst 



Telephone Number of the Officer of the 
Company. Accounting Firm or the 
Security Analyst" 



Statutory Authority G.S. 58-2-40; 58-58-50(i); 58-58-50(j). 



.0307 ACTUARIAL MEMORANDUM WITH 
ASSET ADEQUACY ANALYSIS 

(a) General: 
£1) In accordance with G.S. 58-58-50(1) 
and (i). the a ppointed actuary shall 
prepare a memorandum to the company 
describing the analysis done in support 
of his or her opinion regarding the 
reserves under an opinion prescribed by 
Rule .0306 of this Section. The memo- 
randum shall be made available for 
examination by the Commissioner upon 
request and shall be returned to the 
company after the examination and 
shall not be subject to automatic filing 
with the Commissioner. 

(2) In preparing the memorandum, the 
appointed actuary may rely on. and 
include as a part of his or her own 
memorandum, memoranda prepared and 
signed by other actuaries who are quali- 
fied within the meaning of Rule 
.0303(b) of this Section, with respect to 
the areas covered in such memoranda, 
and so state in their memoranda. 

(3) If the Commissioner requests a 
memorandum and no such 
memorandum exists or if the 
Commissioner finds that the analysis 
described in the memorandum fails to 
meet the standards of the Board or the 
standards and requirements of this 
Section. the Commissioner may 
designate a qualified actuary to review 
the opinion and prepare such supporting 
memorandum as is required for review. 

(4) Tlie reviewing actuary shall have the 
same status as an examiner for purposes 
of obtaining data from the company and 
the work papers and documentation of 
the reviewing actuary shall be retained 
by the Commissioner; provided, 
however, that any information provided 
by the company to the reviewing 



actuary and included in the work papers 

shall be considered as material provided 

by the company to the Commissioner 

and shall be kept confidential to the 

same extent as is prescribed by law 

with respect to other material provided 

by the company to the Commissioner 

under G.S. 58-58-50(i). The reviewing 

actuary shall not be an employee of a 

consulting firm involved with the 

preparation of any prior memorandum 

or opinion for the company under this 

Section for any one of the current year 

or the preceding three years. 

(b) When an actuarial opinion under Rule .0306 

of this Section is provided, the memorandum shall 

demonstrate that the analysis has been done in 

accordance with the standards for asset adequacy 

referred to in Rule .0303(d) of this Section and 

any additional standards under this Section. It 

shall specify: 

(1) For reserves: 

(A) Product descriptions, including market 
description, underwriting, and other 
aspects of a risk profile, and the 
specific risks the appointed actuary 
deems to be significant: 

(B) Source of liability in force: 

(C) Reserve method and basis; 

(D) Investment reserves; 

(E) Reinsurance arrangements. 

(2) For assets: 

(A) Portfolio descriptions, including a risk 
profile disclosing the quality, 
distribution, and types of assets; 
Investment and disinvestment 



(C) 



assumptions: 
Source of asset data; 
Asset valuation bases. 



(3) Analysis basis: 

(A) Methodology; 

(B) Rationale for inclusion or exclusion of 
different blocks of business and how 
pertinent risks were analyzed; 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



903 



PROPOSED RULES 



(C) Rationale for degree of rigor in 
analyzing different blocks of business: 

(D) Criteria for determining asset 
adequacy; 

(E) Effect of federal income taxes, 
reinsurance, and other actuarially or 
financially relevant factors. 

(4) Summary of results. 

(5) Conclusion(s). 

(c) The memorandum shall include a statement: 
"Actuarial methods, considerations 
and anah^es used in the preparation 
of this memorandum conform to the 
a ppropriate Standards of Practice as 
promulgated by the Actuarial 
Standards Board, which standards 
form the basis for this 
memorandum." 

Statutory Authority G.S. 58-2-40; 58-58-50(i); 
58-58-50(j). 

.0308 ADDITIONAL CONSIDERATIONS 
FOR ANALYSIS 

(a) For the asset adequacy analysis for the 
opinion provided in accordance with Rule .0306 of 
this Section, reserves and assets may be aggregated 
by either of the following methods: 

(1) Aggregate the reserves and related 
actuarial items and the supporting assets 
for different products or lines of 
business before analyzing the adequacy 
of the combined assets to mature the 
combined liabilities. The appointed 
actuary must be satisfied that the assets 
held in support of the reserves and 
related actuarial items so aggregated are 
managed in such a manner that the cash 
flows from the aggregated assets are 
available to help mature the liabilities 
from the blocks of business that have 
been aggregated. 

(2) Aggregate the results of asset adequacy 
analysis of one or more products or 
lines of business, the resen.'es for which 
prove through analysis to be redundant, 
with the results of one or more products 
or lines of business, the reserves for 
which proN'e through analysis to be 
deficient. The appointed actuary must 
be satisfied that the asset adequacy 
results for the various products or lines 
of business for which the results are so 



aggregated: 
(A) Are developed 



using consistent 



economic scenanos. or 

£B] Are subject to mutually independent 

risks, i.e.. the likelihood of events 

affecting the adequacy of the assets 

supporting the redundant reserves is 

completely unrelated to the likelihood 

of events affecting the adequacy of 

the assets supporting the deficient 

reserves. 

In the event of any aggregation, the 

actuary must disclose in his or her 

opinion that such reserves were 

aggregated on the basis of the methods 

described in Subparagraphs (a)(n. 

(a)(2)(A), or (a)(2)fB) of this Rule, 

whichever is applicable, and describe 

the aggregation in the supporting 

memorandum. 

(b) The appointed actuary shall analyze only 
those assets held in su pport of the reserves that are 
the subject for specific analysis, hereinafter called 
"specified reserves." A particular asset or portion 
thereof supporting a group of specified reserves 
cannot support any other group of specified 
reserves. An asset may be allocated over several 
groups of specified reserves. The annual statement 
value of the assets held in support of the reserves 
shall not exceed the annual statement value of the 
specified reserves, except as provided in Paragraph 
(c) of this Rule. If the method of asset allocation 
is not consistent from year to year, the extent of 
its inconsistency shall be described in the 
supporting memorandum. 

(c) An appropriate allocation of assets in the 
amount of the Interest Maintenance Reserve 
(IMR). whether positive or negative, shall be used 
in any asset adequacy analysis. Analysis of risks 
regarding asset default may include an appropriate 
allocation of assets supporting the Asset Valuation 
Reserve (AVR): these AVR assets may not be 
applied for any other risks with respect to reserve 
adequacy. Analysis of these and other risks may 
include assets supporting other mandatory or 
voluntary reserves available to the extent not used 
for risk analysis and reserve support. 

The amount of the assets used for the AVR must 
be disclosed in the Table of Reserves and 
Liabilities of the opinion in the memorandum. 
The method used for selecting particular assets or 
allocated portions of assets must be disclosed in 
the memorandum. 

(d) For the purpose of performing the asset 
adequacy analysis required by this Section, the 
qualified actuary shall follow standards adopted by 
the Board: provided, however, that the a ppointed 



904 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



actuary must consider in the analysis the effect of 
at least the following interest rate scenarios: 



ill 
121 



13} 



Level with no deviation: 

Uniformly increasing over 10 years at 

one-half of one percent per year and 

then level: 

Uniformly increasing at one percent per 

year over five years and then uniformly 

decreasing at one percent per year to 

the original level at the end of 10 years 

and then level: 

An immediate increase of three percent 

and then level: 

Uniformly decreasing over 10 years at 

one-half of one percent per year and 

then level; 

Uniformly decreasing at one percent 

per year over five years and then 



141 
151 

£61 



uniformly increasing at one percent per 

year to the original level at the end of 

10 years and then level: and 

(7) An immediate decrease of three percent 

and then level . 

For these and other scenarios that may be 

used, projected interest rates for a 

five-year U.S. Treasury Note need not be 

reduced beyond the point where the 

five-year U.S. Treasury Note yield would 

be at 50 percent of its initial level . 

The beginning interest rates may be 

based on interest rates for new 

investments as of the valuation date 

similar to recent investments allocated to 

support the product being tested or be 

based on an outside index, such as U.S. 

Treasury yields, of assets of the 

a ppropriate length on a date close to the 

valuation date. Whichever method is 

used to determine the beginning yield 

curve and associated interest rates shall 

be specifically defined. The beginning 

yield curve and associated interest rates 

shall be consistent for all interest rate 

scenarios. 

(e) The appointed actuary shall retain on file. 

for at least seven years, sufficient documentation 

so that it will be possible to determine the 

procedures followed, the analyses performed, the 

bases for assumptions and the results obtained. 

Statutory Authority G.S. 58-2-40; 58-58-50(i); 
58-58-50(j). 



Notice is hereby given in accordance with G.S. 
150B-21.2 that the N. C. Departtnent of Insumnce 
intends to amend rule cited as 11 NCAC 12 .1004 
and adopt . 1023. 

Ihe proposed effective date of this action is 
December 1, 1994. 

Ihe public hearing will be conducted at 10:00 
a.m. on October 7, 1994 at the Dobbs Building, 
3rd Floor Hearing Room, 430 N. Salisbury Street, 
Raleigh, N.C. 27611. 

Reason for Proposed Action: 11 NCAC 12 .1004 
& .1023 - lb comport with NAIC model act. 

Lyomment Procedures: Written comments may be 
sent to Teresa Shackelford at 430 N. Salisbury 
Street, Raleigh, N.C. 27611. Oral presentations 
may be made at the public hearing. Anyone 
having questions should call Teresa Shackelford at 
(919) 733-5050. or Ellen Sprenkel at (919) 733- 
4529. 

CHAPTER 12 - LIFE AND 
HEALTH DIVISION 

SECTION ,1000 - LONG-TERM 
CARE INSURANCE 

.1004 POLICY PRACTICES AND 
PROVISIONS 

(a) The terms "guaranteed renewable" or "non- 
cancellable" may not be used in any individual 
policy without further explanatory language in 
accordance with the disclosure requirements of 1 1 
NCAC 12 .1006. No such policy issued to an 
individual shall contain renewal provisions other 
than "guaranteed renewable" or "noncancellable". 

(b) The term "guaranteed renewable" may be 
used only when the insured has the right to contin- 
ue the policy in force by timely payments of 
premiums; during which period the insurer has no 
unilateral right to make any change in any provi- 
sion of the policy while the policy is in force and 
can not refuse to renew: Provided that rates may 
be revised by the insurer on a class basis. 

(c) The word "noncancellable" may be used 
only when the insured has the right to continue the 
policy in force by timely payments of premiums; 
during which period the insurer has no right to 
unilaterally make any change in any provision of 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



905 



PROPOSED RULES 



the policy or in the premium rate. 

(d) No policy may limit or exclude coverage by 
type of illness, treatment, medical condition, or 
accident, except as follows: 

(1) preexisting conditions as specified in 
G.S. 58-55-30; 

(2) mental or nervous disorders, except for 
Alzheimer's Disease; 

(3) alcoholism and drug addiction; 

(4) illness, treatment, or medical condition 
arising out of: 

(A) war or act of war (whether declared 
or undeclared); 

(B) participation in a felony, riot, or 
insurrection; 

(C) service in the armed forces or units 
auxiliary thereto; 

(D) suicide, attempted suicide, or inten- 
tionally self-inflicted injury; or 

(E) aviation activity as a nonfere-paying 
passenger; 

(5) treatment provided in a government 
facility (unless otherwise required by 
law); services for which benefits are 
available under Medicare, under any 
other governmental program (except 
Medicaid), or under any state or federal 
workers' compensation, employer's 
liability, or occupational disease law; 
services provided by a member of the 
insured's immediate femily; and servic- 
es for which no charge is normally 
made in the absence of insurance; 

(6) exclusions and limitations for payment 
for services provided outside the United 
States; and 

(7) legitimate variations in benefit levels to 
reflect differences in provider rates. 

(e) Termination of a policy shall be without 
prejudice to any benefits payable for institutional- 
ization if the institutionalization began while the 
policy was in force and continues without interrup- 
tion after termination. Such extension of benefits 
beyond the period during which the policy was in 
force may be limited to the duration of the benefit 
period, if any, or to payment of the maximum 
benefits; and may be subject to any policy waiting 
period and all other applicable provisions of the 
policy. 

(fl No insurer may increase the rate or premium 
charged to an insured for a policy because of: 

(1) the increasing age of the insured at ages 
beyond 65; or 

(2) the amount of time the insured has been 
covered under a policy. 



Statutory Authority G.S. 58-2-40(1); 58-55-30(a). 

.1023 INCONTECTABILITY PERIOD 

(a) For a policy that has been in force for less 
than six months, an insurer may rescind the policy 
or deny an otherwise valid long-term care insur- 
ance claim upon a showing of misrepresentation by 
the insured that is material to the acceptance for 
coverage. 

fb) For a policy that has been in force for at 
least six months but less than two years, an insurer 
may rescind the policy or deny an otherwise valid 
long-term care insurance claim upon a showing of 
misrepresentation by the insured that is both 
material to the acceptance for coverage and that 
pertains to the condition for which benefits are 
sought. 

(c) After a policy has been in force for two 
years, the policy is not contestable upon the 
grounds of misrepresentation alone; that policy 
may be contested only u[X)n a showing that the 
insured knowingly and intentionally misrepresented 
relevant facts relating to the insured's health. 

(d) No policy may be field issued based on 
medical or health status. For purposes of this 
Paragraph, "field issued" means a policy or certifi- 
cate issued by an agent or a third-party administra- 
tor pursuant to the underwriting authority granted 
to the agent or third party administrator by an 
insurer. 

(e) If an insurer has paid benefits under a 
policy, the benefit payments may not be recovered 
by the insurer if the policy i^ rescinded. 

Statutory Authority G.S 58-2-40(1); 58-55-30(a). 

TITLE 13 - DEPARTMENT OF LABOR 

jyiotice is hereby given in accordance with G.S. 
150B-21.2 that the NC Department of 
Labor/ Occupational Safety & Health intends to 
amend rule cited as 13 NCAC 07F .0101, with 
changes from the proposed text noticed in the 
Register, Volume 9, Issue 2, pages 77 - 80. 

L he proposed effective date of this action is 
December 1, 1994. 

Ixeason for Proposed Action: Revisions were 
made to the proposed text based on written com- 
ments received and based on comments received at 
the May 4, 1994 public hearing. G.S 95-131 
requires the Commissioner of Labor to adopt 



906 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



federal OSHA standards or standards that are as 
effective as federal standards. 

i^omment Procedures: Written comments will be 
accepted through October 17, 1994. Direct all 
correspondence to Jill F. Cramer, NCDOL/OSHA, 
319 Chapanoke Road, Suite 105, Raleigh, NC 
27603-3432. 

riscal J\ote: This Rule affects the expenditures 
or revenues of local funds. A fiscal note was 
submitted to the Fiscal Research Division on 



August 29, 1994, OSBM on August 29. 1994, N. C. 
League of Municipalities on August 29, 1994, and 
N.C. Association of County Commissioners on 
August 29, 1994. 

tLditor's Note: An agency may not adopt a rule 
that differs substantially from the text of a pro- 
posed rule published in the Register, unless the 
agency publishes the text of the proposed differ- 
ent rule and accepts comments on the new text 
for at least 30 days after the publication of the 
new text. 



CHAPTER 7 - OSHA 

SUBCHAPTER 7F - STANDARDS 

SECTION .0100 - GENERAL INDUSTRY CTANDARDS 

.0101 GENERAL INDUSTRY 

(a) The provisions for the Occupational Safety and Health Standards for General Industry, Title 29 of the 
Code of Federal Regulations Part 1910, are incorporated by reference except as follows: 

(1) Subpart H - Hazardous Materials, 29 CFR 1910.120, Hazardous waste operations and emergency 
response, §1910.120(q)(6) is amended by adding a new level of training: 

"(vi) First responder operations plus level. First responders at operations plus level are individuals 
who respond to hydrocarbon fuel tank leaks where the leaking tanks contain a hydrocarbon fuel which 
is used to propel the vehicle on which the tank is located. Only those vehicles designed for highway 
use or those used for industrial, agricultural or construction purposes are covered. First responders 
at the operations plus level shall have received at least training equal to first responder operations 
level and, in addition, shall receive training or have had sufficient experience to objectively 
demonstrate competency in the following areas and the employer shall so certify: 

(A) Know how to select and use proper specialized personal protective equipment provided to the first 
responder at operations plus level; 

(B) Understand basic hazardous materials terms as they pertain to hydrocarbon fuels; 

(C) Understand hazard and risk assessment techniques that pertain to gasoline, diesel fuel, propane 
and other hydrocarbon fuels; 

(D) Be able to perform control, containment, and/or confinement operations for gasoline, diesel 
fuel, propane and other hydrocarbon fuels within the capabilities of the available resources and 
personal protective equipment; and 

(E) Understand and know how to implement decontamination procedures for hydrocarbon fuels. " 

(2) Subpart Z — Toxic and Hazardous Substances, 29 CFR 1910.1000, Air Contaminants: 
Re-adoption of revised permissible exposure limits as originally published in 54 FR (January 19, 1989) 
pages 2496 -2533 and pages 2668 - 2695 as follows: 



Chemical Name 

Aluminum 

Bismuth telluride, Undoped 

Chlorine dioxide 



"RESPIRATORY EFFECTS 
CAS No. 

7429-90-5 
1304-82-1 
10049-04-4 



PEL 

15 mg/m' TWA Total Dust 
5 mg/m' TWA Resp. fraction 
15 mg/m' TWA Total Dust 
5 mg/m' TWA Resp. fraction 
0. 1 ppm TWA 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



907 



PROPOSED RULES 



Chromium metal (as Cr) 


7440-47-3 


Coal Dust (<5% quartz) 


None 


Resp. fraction 




Coal Dust (>5% quartz) 


None 


Respirable quartz fraction 




Ethyl acrylate 


140-88-5 


Ferrovanadium dust 


12604-58-9 


Grain Dust (oat, wheat, barley) 


None 


Graphite, natural. 


7782-42-5 


Resp. Dust 




Indium & compounds (as In) 


7440-74-6 


Iron oxide (dust & fume) 


1309-37-1 


Methylene bis 


5124-30-1 


(4-Cychlohexylisocyanate) 




Mica, Respirable Dust 


12001-26-2 


Nitrogen dioxide 


10102-44-0 


Oxygen difluoride 


7783-41-7 


Ozone 


10028-15-6 


Paraquat, Respirable Dust 


4685-14-7 


Silica, crystalline 


14464-46-1 


cristobalite, Respirable Dust 




Silica, crystalline quartz, 


14808-60-7 


Respirable Dust 




Silica, crystalline 


15468-32-3 


tridymite, Respirable Dust 




Silica, crystalline tripoli 


1317-95-9 


(as quartz) Respirable Dust 




Silica, fused 


60676-86-0 


Respirable Dust 




Soapstone, total dust 


None 


Soapstone, Respirable Dust 


None 


Sulfur dioxide 


7446-09-5 


Sulfur tetrafluoride 


7783-60-0 


Talc (containing no asbestos) 


14807-96-6 


Respirable Dust 




Tin oxide (as Sn) 


7440-31-5 


Trimellitic anhydride 


552-30-7 


Wood dust, hard 


None 


Wood dust, soft 


None 


Wood dust, allergenic 


None 



0.3 ppm STEL 

1 mg/m' TWA 

2 mg/m' TWA 

0.1 mg/m^ TWA 

5ppm TWA 

25 ppm STEL, Skin 

1 mg/m' TWA 

3 mg/m' STEL 
10 mg/m' TWA 
2.5 mg/m' TWA 

0.1 mg/m'TWA 

10 mg/m' TWA 

0.01 ppm Ceiling, Skin 

3 mg/m' TWA 

1 ppm STEL 
0.05 ppm Ceiling 
0.1 ppm TWA 
0.3 ppm STEL 

0.1 mg/m'TWA, Skin 
0.05 mg/m' TWA 

0.1 mg/m'TWA 

0.05 mg/m' TWA 

0.1 mg/m^ TWA 

0.1 mg/m' TWA 

6 mg/m' TWA 
3 mg/m' TWA 

2 ppm TWA 
5 ppm STEL 
0.1 ppm Ceiling 
2 mg/m^ TWA 

2 mg/m^ TWA 
0.005 ppm TWA 
5 mg/m' TWA 
10 mg/m^ STEL 
5 mg/m' TWA 
10 mg/m^ STEL 
2.5 mg/m' TWA 



( 



(Western Red Cedar) 



Chemical Name 

Acrylamide 
Amitrole 



AVOIDANCE OF CANCER 

CAS No. 

79-06-1 
61-82-5 



PEL 

0.03mg/m^ TWA, Skin 
0.2 mg/m' TWA 



908 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



Carbon tetrachloride 


56-23-5 


Chloroform 


67-66-3 


Chromic acid 


1333-82-0 


Dimethyl sulfete 


77-78-1 


2-Nitropropane 


79-46-9 


Perchloroethylene 


127-18-4 


o-Toluidine 


95-53-4 


p-Toluidine 


106-49-0 


Vinyl bromide 


593-60-2 


Vinyl cyclohexene dioxide 


106-87-6 



2 ppm TWA 

2 ppm TWA 

0.1 mg/m' Ceiling 

0.1 ppm TWA, Skin 

10 ppm TWA 

25 ppm TWA 

5 ppm TWA, Skin 

2 ppm TWA, Skin 

5 ppm TWA 

10 ppm TWA, Skin. " 

(3) Subpart R ^z Special Industries ^i incorporation by reference of final rule for 29 CFR 1910.269, 
Electric Power Generation, Transmission, and Distribution, including Appendices A through E. 
published in 59 FR (January 31. 1994) pages 4437 ; 4475, and all typographical and grammatical 
corrections to 1910.269 as published hi 59 FR (June 30. 1994) pages 33660 - 33664, except that 
29 CFR 1910.269(g))(2)(v) is amended to read: 

"(v) Fall arrest equipment, work positioning equipment, or travel restricting equipment shall be used 
by employees working at elevated locations more than 4 feet (1.2 m) above the ground on poles, 
towers or similar structures if other fall protection has not been provided. A fall protection 
system as defined in Subpart M ; Rill Protection of 29 CFR 1926 js required to be used by all 
employees when ascending, descending or changing locations on poles, towers or similar 
structures. However, the use of non-locking snap hooks with any fall protection system js 
prohibited as of the effective date of this rule. Qualified employees may free climb wood poles 
if the employer can insure (1) that the employee is able to comfortably and safely grip the pole 
with both hands while climbing. (2) that the pole is free from attachments or any configurations 
of attachments that will materially impair the ability of a qualified employee to safely free climb 
the pole. (3) that the pole is otherwise free from impediments, contaminants or conditions of any 
type, including but not limited to ice, chemical treatments which harden the poles, or high winds, 
and (4) that the employee is able to climb such structures without material physical impairments 
including over-exertion, lack of sleep or other physical stresses. " 
29 CFR 1910.269 as amended above is effective December 1, 1994, except 29 CFR 1910.269(a)(2) 
Training is efl'ective January 31, 1995, and 29 CFR 1910.269(v)(l l)(xii) is effective February J^ 
1996. 

(4) Subpart Z — Toxic and Hazardous Substances — incorporation by reference of modified final rule 
for 29 CFR 1910.1200, Hazard Communication, including Appendices A through E, published in 
59 FR (February 9, 1994) pages 6170 - 6184 except that 1910.1200(b)(6)(ii) is amended to read: 
"(ii) Any hazardous substance as such term is defined by the Comprehensive Environmental 
Response, Compensation, and Liability Act (CERCLA) (42 U.S.C. 9601 et seq), when regulated 
as a hazardous waste under that Act by the Environmental Protection Agency;" 

(b) The parts of the Code of Federal Regulations adopted by reference in this Subchapter shall not 
automatically include any subsequent amendments thereto, except as follows: 

(1) Subpart H — Hazardous Materials: 

(A) Technical corrections at 1910.109(g)(4)(v), Explosives and Blasting Agents, published in 58 FR 
(March 29, 1993) page 16496 and adopted by the North Carolina Department of Labor on 
December 31, 1993. 

(B) Technical corrections at 1910.110(d)(ll), Storage and Handling of Liquefied Petroleum Gases, 
published in 58 FR (March 19, 1993) page 15089 and adopted by the North Carolina Department 
of Labor on December 31, 1993. 

(2) Subpart I — Personal Protective Equipment — addition of paragraphs (d), (e) and (f) to 1910.132 - 
General requirements; revisions to 1910.133 - Eye and face protection, 1910.135 - Head pro- 
tection, 1910.136 - Foot protection; and addition of 1910.138 - Hand protection, including non- 
mandatory Appendices A and B, published in 59 FR (April 6, 1994) pages 16360 - 16364 and 
adopted by the North Carolina Department of Labor on September 1, 1994; addition of paragraph 
(g) to 1910.132 - General requirements; technical and clarifying amendments to 1910.133 - Eye 
and face protection, 1910.136 - Foot protection, and 1910.138 - Hand protection, as published in 



9:12 NORTH CAROLINA REGISTER September 15, 1994 909 



PROPOSED RULES 



59 FR (July 1, 1994) pages 33910 - 33911 and effective on September 1, 1994; 

(3) Subpart J — Genera] Environmental Controls — typographical and clarifying corrections at 
1910.146, Permit-Required Confined Spaces, published in 58 FR (June 29, 1993) pages 34844 - 
34851 and adopted by the North Carolina Department of Labor on September 24, 1993; a metric 
equivalent addition of "1.52 m" to 1910.146 (k) (3) (ii) and revisions to "Atmospheric monitoring" 
section of Appendix E as published in 59 FR (May 19, 1994) pages 26114 - 26116 and adopted 
by the North Carolina Department of Labor on September 1, 1994; corrections are to final rule for 
Permit-Required Confined Spaces as originally published in 58 FR 4462 (January 14, 1993); 

(4) Subpart Z — Toxic and Hazardous Substances: 

(A) Revocation of exposure limits in "Final rule limits" columns of Table Z-l-A at 1910.1000, Air 
Contaminants, published in 58 FR (June 30, 1993) pages 35338 - 35351 and adopted by the North 
Carolina Department of Labor on September 24, 1993. 

(B) Correction to Table Z-3 Mineral Dust at 1910. 1000, Air Contaminants, published in 58 FR (July 
27, 1993) page 40191 and adopted by the North Carolina Department of Labor on December 31, 
1993. 

(C) Typographical and technical corrections at 1910.1027, Cadmium, published in 58 FR (April 23, 
1993) pages 21778 - 21787 and adopted by the North Carolina Department of Labor on 
September 24, 1993; corrections are to final rule for Occupational Exposure to Cadmium as 
originally published in 57 FR 42101 (September 14, 1992). 

(c) Copies of the applicable Code of Federal Regulations sections referred to in this Subchapter are available 
to the public. Please refer to 13 NCAC 7A.0302 for the costs involved and from whom copies may be 
obtained. 



Statutory Authority G.S. 95-131; 95-133; 150B-21.6. 



TITLE ISA - DEPARTMENT OF 

ENVIRONMENT, HEALTH, AND 

NATURAL RESOURCES 



written comments must be delivered or mailed to 
the N. C. Wildlife Resources Commission, 512 N. 
Salisbury Street, Raleigh, NC 27604-1188. 



jyiotice is hereby given in accordance with G.S. 
150B-21.2 that the North Carolina Wildlife Re- 
sources Commission intends to amend rule cited as 
15A NCAC lOF .0103 and adopt lOG .0206. 

1 he proposed effective date of this action is 
December 1, 1994. 



CHAPTER 10 - WILDLIFE 
RESOURCES AND WATER SAFETY 

SUBCHAPTER lOF - MOTORBOATS 
AND WATER SAFETY 

SECTION .0100 - MOTORBOAT 
REGISTRATION 



1 he public hearing will be conducted at 10:00 
a.m. on September 30, 1994 at the Archdale 
Building, Room 332, 512 N. Salisbury Street, 
Raleigh, NC 27604-1188. 

Jxeason for Proposed Action: 15A NCAC lOF 
.0103 & lOG .0206 - To define authority of boat 
registration agents and state source of information 
regarding procedures. 

(comment Procedures: Interested persons may 
present their views either orally or in writing at 
the hearing. In addition, the record of hearing 
will be open for receipt of written comments from 
September 15. 1994 to October 17, 1994. Such 



.0103 TRANSFER OF OWNERSHIP 

(a) Transfer Direct from One Individual Owner 
to Another Individual Owner 

(1) If the ownership of a registered motor- 
boat is changed during the registration 
period, the owner shall complete the 
statement of transfer on the reverse side 
of the certificate of number, date as of 
the day of the transaction, sign, and 
deliver to the new owner. 

(2) The new owner shall apply for a new 
certificate of number on an official 
application form. The original number 
must be retained when a vessel num- 
bered is again registered as a motor- 
boat. 

(3) For 60 days following the transfer of 



910 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



ownership of a registered motorboat 
during the registration period, the new 
owner may use the certificate of num- 
ber of the prior owner as a temporary 
certificate of number pending receipt of 
his own certificate; provided, the certif- 
icate is endorsed in accordance with 
Subparagraph (a)(1) of this Rule. In 
the event the transfer occurs during the 
60 days prior to expiration of the regis- 
tration period, the original certificate 
will still be honored up to the full 
period of 60 days as a temporary certif- 
icate even though it would otherwise 
have expired. Where transfer of own- 
ership from one individual to another 
occurs after the expiration of the regis- 
tration period, the certificate of number 
may not be used by the new owner. 

(b) Transfer of a Previously-Registered Motor- 
boat Through a Dealer 

(1) The owner transferring his motorboat to 
a dealer during the registration period 
shall give the certificate of number to 
the dealer after dating and signing the 
statement of transfer on the reverse side 
of the certificate on the day of the 
transaction. 

(2) When the motorboat is sold by the 
dealer, he shall date and sign the certif- 
icate of number on the reverse side on 
the day of the transaction and deliver it 
to the new owner. 

(3) For a period of 60 days following the 
transfer of ownership of a registered 
motorboat from or through a dealer to 
a new owner, the new owner may use 
the certificate of the prior individual 
owner as a temporary certificate of 
number pending receipt of his own 
certificate; provided: 

(A) The certificate is endorsed in accor- 
dance with Subparagraphs (1) and (2) 
of this Paragraph. 

(B) The original owner endorsed the 
certificate to the boat dealer while it 
was still in force, and 

(C) The boat dealer's sale and endorse- 
ment occurs while the registration 
certificate is still in force. 

(4) Except as permitted above, a certificate 
of number may not be used after the 
expiration of the registration period. 

(c) Transfer of an Individually-Registered 
Motorboat by a Dealer or Manufacturer. Motor- 



boats individually numbered by dealers or manu- 
facturers shall upon transfer of ownership be 
governed by the provisions of Paragraph (a) of this 
Rule. 
(d) Temporary Certificate of Number 

(1) Upon acquisition of a motorboat not 
previously numbered or a motorboat the 
registration of which has expired, the 
new owner may transmit with his appli- 
cation for the regular certificate of 
number a request for a tempuDrary cer- 
tificate of number. The request must 
state the date the vessel was acquired 
by the applicant. For a period not 
exceeding 60 days following the date of 
acquisition, the motorboat may be 
operated on the temporary certificate of 
number pending receipt of the regular 
certificate from the Wildlife Resources 
Commission. 

(2) In order to make temporary certificates 
of number available locally within the 
State, boat dealers and manufecturers 
who conduct business from established 
locations in North Carolina may be 
designated agents of the Wildlife Re- 
sources Commission for the purpose of 
issuing temporary certificates of motor- 
boat number. To qualify as an agent 
for this purpose, such dealer or manu- 
facturer must enter into a written agree- 
ment with the Wildlife Resources Com- 
mission by which he assumes responsi- 
bility for conducting the boat registra- 
tion agency as a public service and in 
strict compliance with these regulations. 
Upon approval and ratification of such 
agreement by the Executive Director 
or his designee, the agent will be fur- 
nished with a supply of the temporary 
certificate forms together with forms 
for use in applying for the regular 
certificate of motorboat number. The 
forms for temporary certificate of num- 
ber are serially numbered and are pre- 
pared in triplicate so as to provide an 
original (Part 1) and two copies (Parts 
2 and 3). 

(3) A boat registration agency issuing 
temporary certificates of motorboat 
number shall be conducted in accor- 
dance with the following requirements 
and restrictions: 

(A) The temporary certificates of number 
shall be issued without charge. 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



911 



PROPOSED RULES 



(B) There shall be no substitute for the 
printed form of certificate supplied by 
the Wildlife Resources Commission. 
No agent shall issue any other writing 
purporting to authorize the use of an 
unregistered motorboat. 

(C) TTie certificates shall be issued con- 
secutively in the order in which they 
are serially numbered, beginning with 
the lowest number. 

(D) When the vessel has been acquired 
from a source other than the agent, a 
temporary certificate of number shall 
not be issued unless and until the 
owner produces a bill of sale or other 
memorandum of transfer which identi- 
fies the vessel and which has been 
dated, signed and acknowledged by 
the transferor before a notary public 
or other officer authorized to take 
acknowledgements. 

(E) All information called for on the 
temporary certificate of number shall 
be properly entered in the spaces 
provided, including the date of expira- 
tion of the certificate which shall be 
the 60th day following the date of 
acquisition of the vessel by the owner. 

(F) The temporary certificate must be 
signed by the owner. The agent shall 
deliver to the owner Part 1 of the 
certificate and a form with which to 
apply for the regular certificate of 
number. 

(G) Within 30 days following the issuance 
of a temporary certificate of number, 
the agent shall transmit Part 2 thereof 
to the Wildlife Resources Commission 
at the address indicated in Rule 
.0102(a)(5) of this Section. If a bill 
of sale or other memorandum of 
transfer has been required, the 
original or a copy thereof shall be 
attached to the Commission's copy of 
the temporary certificate of number. 

(H) The agent shall retain Part 3 of the 
temporary certificate of number for a 
period of at least one year and shall 
permit inspection thereof during 
business hours by any law 
enforcement officer or authorized 
personnel of the Commission. 

(I) No agent shall knowingly issue more 
than one temporary certificate of 
number for the same vessel during 



any calendar year. 

(J) No agent oholl oasumc rcoponoibility 

for making application for a regular 
certificate of motorboat number on 
behalf of any owner. 

(J) An agent may make a pplication for a 
certificate of number or for a 
registration on behalf of a new owner 
to whom a temporary certificate of 
number has been issued provided the 
a pplication and fee is submitted to the 
Wildlife Resources Commission 
within 10 days of the date of issuance 
of the temporary certificate. 

(K) Upon termination of a boat 
registration agency which issues 
temporary certificates of motorboat 
number, all copies (Parts 3) of such 
certificates theretofore issued and all 
unused forms for temporary 
certificates of number then remaining 
in possession of the terminated agency 
shall be delivered to the Wildlife 
Resources Commission or to a 
Commission employee. 

(4) A boat registration agency which issues 
temporary certificates of motorboat 
number, being a mutual and voluntary 
undertaking, may be terminated at any 
time, with or without cause, by either 
party thereto by giving a notice of such 
termination to the other party. 

{§3 Every — owner — of a — motorboat — wh« 

obtain i a — a — temporary — certificate — ef 
number from a local agent as provided 
by thi s Section s hall, not later than 2 4 

hour s thereafter, transmit bis 

application for the regular certificate of 
motorboat number, together with the 
appropriate — fee; — to — the — Wildlife 
Resources Commi ss ion at the addres s 
indicated in Rule .0102(a)(5) of this 
Section. 

(5) If the agent who issues a temporary 
certificate of number does not submit 
the application for certificate of number 
of registration on behalf of the new 
owner, the new owner must submit the 
application and fee to the Wildlife 
Resources Commission within 10 days 
of the date of issuance of the temporary 
certificate. 

(6) In order to be valid, the temporary 
certificate of boat number must contain 
the following: 



912 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



(A) full name and address of issuing 
agent; 

(B) full name and address of purchaser, 
including zip code; 

(C) previous registration number, if any 
(if none, so state); 

(D) state of principal use of vessel; 

(E) make of vessel; 

(F) length in feet; 

(G) hull material; 

(H) kind of propulsion; 

(I) date of purchase of boat; 

(J) date of application for regular 

certificate of number; 
(K) expiration date of temporary 

certificate; 
(L) signature of purchaser. 
(7) Temporary certificates of number can 
be issued by boat registration agents 
when certificates of number requiring 
corrections other than address or name 
changes are presented for renewal or 
when the agent finds that an error has 
been made in validating the certificate 
of number, 
(e) Demonstration and Use of Vessels Held by 
Dealers 

(1) Demonstration of registered motorboats 
held by dealers for sale may be with the 
use of the certificate of number 
endorsed by the original owner so long 
as the registration is in force. Any 
dealer or any permittee of a dealer 
demonstrating a motorboat must utilize 
a set of dealer's numbers and the 
corresponding dealer's certificate of 
number on such vessel after the original 
certificate of number has expired. The 
dealer's numbers and certificate of 
number may, however, be used during 
demonstrations before the end of the 
registration period at the option of the 
dealer. In any event, where a set of 
dealer's numbers is used upon a 
previously-numbered vessel, the 
original numbers must be covered in 
accordance with Rule .0106(c) of this 
Section. 

(2) Dealers who have bought or otherwise 
possess motorboats for resale and who 
wish to operate or lend out such 
motorboats for more general uses than 
for demonstration only must have the 
individual motorboat registrations 
transferred to their names. 



Authority G.S. 75A-3; 75A-5; 75A-19; 33 C.ER. 
174.21. 

SUBCHAPTER lOG - DISTRIBUTION 

AND SALE OF HUNTING: FISHING: 

AND TRAPPING LICENSE 

SECTION .0200 - BOAT REGISTRATION 
AGENTS 

.0206 AUTHORITY OF BOAT 

REGISTRATION AGENTS 

(a) When it will aid public convenience and 
efficiency in boat registration, boat registration 
agents may be: 

(1) Consigned an allotment of certificates 
of boat number for use m issuing num- 
bers and three-year registrations for 
previously unnumbered boats in accor- 
dance with procedures governing opera- 
tions of agents as a public service as set 
forth in the Wildlife Service Agent 
Manual insuring security of public 
funds, and prescribing requirements for 
reporting sales and remitting funds. 

(2) Authorized to certify the transfer of 
ownership of boars from one owner to 
another and to register boats for a 
three-year period in the new owner's 
name. 

(3) Authorized to renew registrations for 
boat owners when a renewal notice or 
boat registration card is presented. 

(b) Procedures governing the operations of boat 
registration agents are established by the Wildlife 
Resources Commission and set forth in the Wild- 
life Service Agent Manual which is provided to 
each agent in current form. 

Statutory Authority G. S. 75A-3; 75A-5. 

fyotice is hereby given in accordance with G.S. 
150B-21. 2 that the EHNR - Commission for Health 
Services intends to amend rule cited as 15A NCAC 
16A .1102. 

1 he proposed effective date of this action is 
January 1, 1995. 

1 he public hearing will be conducted at 1:30 
p.m. on October 20, 1994 at the Ground Floor 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



913 



PROPOSED RULES 



Hearing Room, Archdale Building, 512 N. Salis- 
bury Street, Raleigh, NC. 

Ixeason for Proposed Action: Current rules allow 
the "year ' for cancer patients to begin with the 
first date of service. Therefore, the year is differ- 
ent for each patient. This results in confusion and 
administrative difficulty. The proposed rule stan- 
dardizes the 'year' to the State fiscal year (July 1 
- June 30). This will make the Cancer Control 
Program definition consistent with other programs 
and will increase administrative efficiency and 
provider understanding. 

(comment Procedures: All persons interested in 
these matters are invited to attend the public 
hearing. Written comments may be presented at 
the public hearing or submitted to Grady L. 
Balentine, Department of Justice, PO Box 629, 
Raleigh, NC 27602-0629. All written comments 
must be received by November 2, 1994. Persons 
who wish to speak at the hearing should contact 
Mr Balentine at (919) 733-4618. Persons who 
call in advance of the hearing will be given 
priority on the speaker's list. Oral presentation 
lengths may be limited depending on the number of 
people that wish to speak at the public hearing. 
Only persons who have made comments at a public 
hearing or who have submitted written comments 
mil be allowed to speak at the Commission 
meeting. Comments made at the Commission 
meeting must either clarify previous comments or 
proposed changes from staff pursuant to comments 
made during the public hearing process. 

IT IS VERY IMPORTANT THAT ALL 
INTERESTED AND POTENTIALLY AFFECTED 
PERSONS, GROUPS, BUSINESSES. 
ASSOCIATIONS, INSHTUTIONS OR AGENCIES 
MAKE THEIR VIEWS AND OPINIONS KNOWN 
TO THE COMMISSION FOR HEALTH SERVICES 
THROUGH THE PUBLIC HEARING AND 
COMMENT PROCESS, WHETHER THEY 
SUPPORT OR OPPOSE ANY OR ALL 
PROVISIONS OF THE PROPOSED RULES THE 
COMMISSION MAY MAKE CHANGES TO THE 
RULES AT THE COMMISSION MEETING IF THE 
CHANGES COMPLY WITH G.S 150B-21.2(f). 

CHAPTER 16 - ADULT HEALTH 

SUBCHAPTER 16A - CHRONIC 
DISEASE 



SECTION .1100 - CANCER 

DIAGNOSTIC AND TREATMENT 

PROGRAM 

.1102 DEFINITIONS 

The following definitions shall apply throughout 
this Section: 

(1) "Cervical intraepithelial neoplasia (CIN)" 
means any condition suggestive of pre- 
invasive cervical cancer which for the 
purpose of these Rules means mild, 
moderate, or severe dysplasia or carcino- 
ma in-situ. 

(2) "Day of Service" means all covered 
services provided in one calendar day. 

(3) "Program" means the Cancer Diagnosis 
and Treatment Program. 

(4) "Year" means one year beginning with 
the day the patient rcccivca — the first 
diagnostic or treatment services rcim 
burscd by the Program, the state fiscal 
year, July \ - June 30. 

Statutory Authority G.S. 130A-205; Sec. 301 & 
31 7, Public Health Services Act, as amended. 

lyiotice is hereby given in accordance with G.S. 
150B-21. 2 that the EHNR - Commission for Health 
Services intends to amend rules cited as ISA 
NCAC ISA .3101 - .3102, .3105 and adopt ISA 
.3106. 

1 he proposed effective date of this action is 
January 1, 1995. 

1 he public hearing will be conducted at 1:30 
p.m. on October 20, 1994 at the Ground Floor 
Hearing Room, Archdale Building, 512 N. Salis- 
bury Street, Raleigh, NC. 

ixeason for Proposed Action: To provide for 
consistency with current recommendations from the 
Centers for Disease Control and Prevention re- 
garding the definition for "elevated Blood lead 
level ". To allow laboratory reporting by computer 
generated report. To provide for separate rules 
regarding notification and abatement requirements. 
To provide consistency with current recommenda- 
tions from the US Environmental Protection Agen- 
cy and the US Department of Housing and Urban 



914 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



Developmental regarding environmental standards 
for lead hazard abatement. 

i^onunent Procedures: All persons interested in 
these matters are invited to attend the public 
hearing. Written comments may be presented at 
the public hearing or submitted to Grady L. 
Balentine, Department of Justice, PO Box 629, 
Raleigh, NC 27602-0629. All written comments 
must be received by November 2, 1994. Persons 
who wish to speak at the hearing should contact 
Mr Balentine at (919) 733-4618. Persons who 
call in advance of the hearing will be given 
priority on the speaker's list. Oral presentation 
lengths may be limited depending on the number of 
people that wish to speak at the public hearing. 
Only persons who have made comments at a public 
hearing or who have submitted written comments 
will be allowed to speak at the Commission 
meeting. Comments made at the Commission 
meeting must either clarify previous comments or 
proposed changes from staff pursuant to comments 
made during the public hearing process. 

IT IS VERY IMPORTANT THAT ALL 
INTERESTED AND POTENTIALLY AFFECTED 
PERSONS, GROUPS, BUSINESSES, 
ASSOCIAHONS, INSmVTlONS OR AGENCIES 
MAKE THEIR VIEWS AND OPINIONS KNOWN 
TO THE COMMISSION FOR HEALTH SERVICES 
THROUGH THE PUBLIC HEARING AND 
COMMENT PROCESS, WHETHER THEY 
SUPPORT OR OPPOSE ANY OR ALL 
PROVISIONS OF THE PROPOSED RULES. THE 
COMMISSION MAY MAKE CHANGES TO THE 
RULES AT THE COMMISSION MEETING IF THE 
CHANGES COMPLY WITH GS 150B-21.2(f). 

CHAPTER 18 - ENVIRONMENTAL 
HEALTH 

SUBCHAPTER 18A - SANITATION 

SECTION .3100 - LEAD POISONING 
PREVENTION IN CHILDREN PROGRAM 

.3101 DEFINITIONS 

As used in this article, unless the context 
requires otherwise: 

(1) "Abatement" means the elimination or 
control of a lead hazard by methods 
approved by the Department. 

(2) "Day care facility" means a structure 
used as a school, nursery, child care 



center, clinic, treatment center or other 
facility serving the needs of children 
under six years of age including any 
outbuilding or other structure or 
surrounding land that may have been 
contaminated from such outbuildings or 
structures, accessible to children under 
six years of age. 

(3) "Department" means the Department of 
Environment, Health, and Natural 
Resources or its authorized agent. 

(4) "Dwelling" means a structure, all or part 
of which is designed for human 
habitation, including any outbuildings or 
other structures, or surrounding land that 
may have been contaminated from such 
outbuildings or structures, accessible to 
children under six years of age. 

(5) "Elevated blood lead level" means a 
blood lead of 3§ 20 ug/dl or greater. 

(6) "Frequently visited" means presence at a 
dwelling, school or day care facility for 
eight hours or more a week for three or 
more weeks, or for 80 hours within a 
period of 10 consecutive days. 

(7) "Lead hazard" means the presence of 
readily accessible, lead-bearing 
substances measuring 1.0 milligram per 
square centimeter or greater by X-ray 
fluorescence analyzer or 0.5 percent or 
greater by chemical analyses (AAS); or 
500 400 parts per million or greater in 
soil; or 50 15 parts per billion or greater 
in drinking water. 

(8) "Managing agent" means any person who 
has charge, care, or control of a building 
or part thereof in which dwelling units or 
rooming units are leased. 

(9) "Readily accessible" means capable of 
being chewed, ingested, or inhaled by a 
child under six years of age. 

Statutory Authority G.S. 130A-13I.5. 

.3102 REPORTS OF ELEVATED 

BLOOD LEVELS IN CHILDREN 

All laboratories that perform blood lead tests 
shall report to the Department elevated blood lead 
levels for children less than six years of age and 
for individuals where the age is unknown at the 
time of testing. Reports shall be made within five 
working days after test completion on forms 
provided by the Department or on self-generated 
reports containing the equivalent information . 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



915 



PROPOSED RULES 



Statutory Authority G.S. 130A-131.5. 

.3105 NOTIFICATION 

fa) Upon determination that a lead hazard exists, 
the Department shall give written notice of the 
lead hazard to the owner or managing agent of the 
dwelling, dwelling unit, school or day care facility 
and to all persons residing in or attending the unit 
or facility. TTie written notice to the owner or 
managing agent shall include recommended 
methods of abatement of the lead hazard. 

{b) — The owner or managing agent shall submit 
a — written — lead — hazard — abatement — ptefl — te — tfee 
Department — within — M — d^-s — ef — lead — hazard 
notification and s hall obtain written approval of th e 
plan prior to initiating abatement. — If the owner or 
managing agent docs not submit an abatement plan 
within — 1 4 days, the Department s hall issue an 
abatement order. — The lead hazard abatement plan 
or order s hall comply with Pamgmph s (c), (d) and 
(c) of this Rule. — Abatement s hall be completed 
within 60 days of the Department's approval of the 
abatement plan. The owner or managing agent 
shall notify the Department and occupants of the 
dates of abatement activities. 

(e) The following methods of abatement of lead 
hazards in paint arc prohibited: 

H) s tripping paint on site with methylene 

chloride based solutions; 

f3) torch or flame burning; 

f^) heating paint with a heat gun above 8 00 

degrees Fahrenheit; 

(4) covering with new paint, contact paper, 

ef — non vin^'l — wallpaper — unless — aH 
readily accessible load based paint has 
been removed; 

■(§) sandblasting; or 

(6) watcrblasting when average wind speed 

exceeds — i-§ — mile s — pef — hour — unless 

vertical — tarpaulin s — extend — from — tfee 

ground to four feet above the surfiicc to 

be abated. 

fd) — All lead containing '^aste and residue of the 

abatement of lead shall be removed and disposed 

of by the person performing the abatement in 

accordance with applicable federal, state, and local 

laws and rule s . 

fe) — All abatement plans s hall require that the 
l e ad hazard be reduced to at least the following 
levels: 

{\) Floor lead dust level s are less than 200 



micrograms f>er square foot; 
(3) Window sill lead du s t level s arc les s 



0)- 



than 500 microgram s per square foot; 
Window well lead dust levels are less 



than 8 00 micrograms {xsr square foot; 

(4) Soil lead level s are less than 500 parts 

per million; and 

(5) Drinking water lead levels less than 50 

parts per billion. 

{?) The — Department — shall — verify — ^i" — visual 

inspection that the approved abatement plan bos 
been completed. The Department may also verify 
plan completion by residual lead du s t monitoring 
and soil or drinking v i Qtcr lead level measurement. 

Statutory Authority G.S. 130A-131.5. 

.3106 ABATEMEP>rr 

(a) Upon determination that a child less than six 
years of age has an elevated blood lead level and 
resides in, attends or frequently visits a dwelling, 
dwelling unit, school or day care facility 
containing lead hazards, the Department shall 
require abatement of the lead hazard. 

(b) The owner or managing agent shall submit 
a written lead hazard abatement plan to the 
Department within 14 days of lead hazard 
notification and shall obtain written approval of the 
plan prior to initiating abatement. If the owner or 
managing agent does not submit an abatement plan 
within 14 days, the Department shall issue an 
abatement order. The lead hazard abatement plan 
or order shall comply with Paragraphs (c), (d) and 
(e) of this Rule. Abatement shall be completed 
within 60 days of the Department's approval of the 
abatement plan. The owner or managing agent 
shall notify the Department and occupants of the 
dates of abatement activities. 

(c) The following methods of abatement of lead 
hazards in paint are prohibited: 

(1) stripping paint on-site with methylene 
chloride-based solutions; 
torch or flame burning; 
heating paint with a heat gun above 800 
degrees Fahrenheit; 

covering with new paint, contact paper, 
or non-vinyl wallpaper unless all 
readily accessible lead-based paint has 
been removed; 

(5) abrasive blasting; or 

(6) watcrblasting when average wind speed 
exceeds 15 miles per hour unless 
vertical tarpaulins extend from the 
ground to four feet above the surface to 
be abated. 

(d) All lead-containing waste and residue of the 
abatement of lead shall be removed and disposed 
of by the person performing the abatement in 
accordance with applicable federal, state, and local 



12) 
{3} 

14) 



916 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



laws and rules. 

(e) All abatement plans shall require that the 
lead hazard be reduced to at least the following 
levels: 

Floor lead dust levels are less than 100 



m 

12} 
13) 
£41 
15} 



micrograms per square foot; 

Window sill lead dust levels are less 

than 500 micrograms per square foot; 

Window well lead dust levels are less 

than 800 micrograms per square foot; 

Soil lead levels are less than 400 parts 

per million; and 

Drinking water lead levels less than 15 

parts per billion. 
(f) The Department shall verify by visual inspec- 
tion that the a pproved abatement plan has been 
completed. The Department may also verify plan 
completion by residual lead dust monitoring and 
soil or drinking water lead level measurement. 

Statutory Authority G.S. 130A-131.5. 

jyiotice is hereby given in accordance with G.S. 
150B-2 1.2 that the EHNR - Commission for Health 
Services intends to amend rules cited as 15A 
NCAC 19B .0101. .0503 and repeal 19B .0310, 
.0314 - .0315. .0318 and .0319. 

1 he proposed effective date of this action is 
January 1, 1995. 

1 he public hearing vAll be conducted at 1:30 
p.m. on October 20, 1994 at the Ground Floor 
Hearing Room, Archdale Building, 512 N. Salis- 
bury Street, Raleigh, NC. 

Jxeason for Proposed Action: Amendments made 
to simulator solution which allows the Division of 
Laboratory Services to prepare control samples in 
a practical manner and better define the rule. 
Repeals are due to new infrared technology now 
used in the State. Breathalyzer and intoximeter 
breath test instruments have been taken out of 
service and are no longer used in DWl arrest. 

y^omment Procedures: All persons interested in 
these matters are invited to attend the public 
hearing. Written comments may be presented at 
the public hearing or submitted to Grady L. 
Balentine, Department of Justice, PO Box 629, 



Raleigh, NC 27602-0629. All written comments 
must be received by November 2, 1994. Persons 
who wish to speak at the hearing should contact 
Mr Balentine at (919) 733-4618. Persons who 
call in advance of the hearing will be given 
priority on the speaker's list. Oral presentation 
lengths may be limited depending on the number of 
people that wish to speak at the public hearing. 
Only persons who have rruide comments at a public 
hearing or who have submitted written comments 
will be allowed to speak at the Commission 
meeting. Comments made at the Commission 
meeting must either clarify previous comments or 
proposed changes from staff pursuant to comments 
made during the public hearing process. 

IT IS VERY IMPORTANT THAT ALL 
INTERESTED AND POTENTIALLY AFFECTED 
PERSONS. GROUPS, BUSINESSES, 
ASSOCIATIONS, INSUTUTIONS OR AGENCIES 
MAKE THEIR VIEWS AND OPINIONS KNOWN 
TO THE COMMISSION FOR HEALTH SERVICES 
THROUGH THE PUBUC HEARING AND 
COMMENT PROCESS, WHETHER THEY 
SUPPORT OR OPPOSE ANY OR ALL 
PROVISIONS OF THE PROPOSED RULES. THE 
COMMISSION MAY MAKE CHANGES TO THE 
RULES AT THE COMMISSION MEETING IF THE 
CHANGES COMPLY WITH G.S. 150B-21.2(f). 

CHAPTER 19 - HEALTH: 
EPIDEMIOLOGY 

SUBCHAPTER 19B - INJURY 
CONTROL 

SECTION .0100 - GENERAL 
POLICIES 

.0101 DEFINTTIONS 

The definitions in G.S. 18B-101, G.S. 20-4.01, 
G.S. 130A-3 and the following shall apply 
throughout this Subchapter: 

(1) "Alcoholic Breath Simulator" shall mean 
a specially designed constant temperature 
water-alcohol solution bath instrument 
devised for the purpose of providing a 
standard alcohol-air mixture; 

(3) "Ampul" mean s a s mall bulbous glass 

vcascl hormotically scaled oontnining an 
alcohol s ensitive reagent con s isting of at 
least 3 — w^. — of a solution containing, 
within plu s or minu s 10 percent, 0.025 
f>crccnt — weight — pef — volume — (w/v) 
potassium dichromate plu s 0.025 percent 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



917 



PROPOSED RULES 



w/v silver nitrate in 50 percent volume 
per — volume — (v/v) — s ulfuric — aeid — aad 
distilled water; 

f^ £2} "Breath-testing Instrument" shall mean an 
instrument for making a chemical 
analysis of breath and giving the resultant 
alcohol concentration in grams of alcohol 
per 210 liters of breath; or an instrument 
that rep>orta an alcohol concentration as 
percent blood alcohol, which shall mean 
grams of alcohol per 210 liters of breath; 

f4) £3} "Controlled Drinking Program" shall 
mean a bona fide scientific, experimental, 
educational, or demonstration program in 
which tests of a person's breath or blood 
are made for the purpose of determining 
his alcohol concentration when such 
person has consumed controlled amounts 
of alcohol; 

f5) £4} "Director" shall mean the Director of the 
Division of Epidemiology of the 
Department; 

(6) £5} "Handling Alcoholic Beverages" shall 
mean the acquisition, transportation, 
keeping in possession or custody, 
storage, administration, and disposition 
of alcoholic beverages done in connection 
with a controlled-drinking program; 

f?) £6} "Observation Period" means a period 
during which a chemical analyst observes 
the person to be tested to determine that 
he has not ingested alcohol or other 
fluids, regurgitated, vomited, eaten, or 
smoked in the 15 minutes immediately 
prior to the collection of a breath 
specimen; the chemical analyst may 
observe while conducting the operational 
procedures in using a breath-testing 
instrument; , and if a chemical analyst 
o ther than the one conducting the analysis 
is the ob s erver, both chemical analysts 
must s ign the operational checkli s t; 

(8) £7} "Permittee" shall mean a chemical 
analyst currently possessing a valid 
permit from the Department to perform 
chemical analyses, of the type set forth 
within the permit; 

{9) £8} "Simulator Solution" shall mean a 
water-alcohol solution made by preparing 
a stock solution of distilled water and 
either 60.5 or 48.4 grams of alcohol per 
liter of solution^ (77.0 ml. of absolute 
alcohol diluted to one liter with distilled 
water; — or — equivalent — ratio) — and — tfeee 
preparing the solution for simulator use 



as a control sample by using either Each 
10 ml. or 8 ml. of this stock solution aad 
is further diluting diluted the solution to 
500 ml. witb by adding distilled water^ 
, which — tbee The resulting simulator 
solution corresponds to the equivalent 
alcohol concentration of 0.10 or 0.08 
resf>ectively. 
{W^ (9) "Verification — e# — Instrumental "Verify 
Instrument Calibration" shall mean 
verification of instrumental accuracy of 
an approved breath testing instrument or 
approved alcohol screening test device by 
employment of a control sample from an 
alcoholic breath simulator using simulator 
solution and obtaining the expected result 
or 0.01 less than the expected result as 
specified in Item f9) £8} of this Rule,; aed 
obtaining a result of 0.10 or 0.09 alcohol 
concentration when using 10 ml. of stock 
solution or a result of 0.08 or 0.07 when 
using 8 ml. of stock solution. When the 
procedures set forth for approved breath 
testing instruments in Section .0300 of 
this Subchapter and for approved alcohol 
screening test devices in Section .0500 of 
this Subchapter are followed and the 
result specified herein is obtained, the 
instrument shall be deemed properly 
calibrated. 



Statutory Authority G. S. 20-139. 1 (b); 20-139. 1 (g). 

SECTION .0300 - BREATH 
ALCOHOL TEST REGULATIONS 

.0310 AMPUL CERTIFICATION 

Ampul s from each manufacturer' s control batch 
(batch containing different control numbers) s hall 
be randomly tested by a chemist who s hall certify 
the content of the alcohol s ensitive reagent in the 
ampul s te s ted. 

Statutory Authority as. 20-1 39. 1(b). 

.0314 BREATHALYZER: MODELS 
900 AND 900A 

The operational procedures to be followed in 
using the Breathalyzer, Models 900 and 900A, arc: 

^i^ Verify instrumental calibration by 

procedures a through k: 

^a^ Insure instrument thermometer s how a 

50 degrcca plus or minus 3 degrees C; 

{b) Gauge and place standard ampul in left 

ampul holder; 



918 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



^e) Gauge test ampul, open, inacrt bubbler, 

place — ifl — right — ampul — holder, — and 

connect bubbler to outlet; 

{d) Turn to take, flu s h, turn to analyze; 

{&) When empty light appears, wait one 

and one half minutca and balance; 

Set scale pointer on start line; 

Insure alcoholic breath simulator thcr 

mometcr shows proper operating tem 

pcroture; 
(h) T\im to take, collect alcoholic breath 

simulator sample, and turn to analyze; 

Record time; 






^ 



e- 



m- 



When empty light appears, wait one 
and one half minutes and balance; 
Record re s ults; 



Insure instrument thermometer s how s 50 



m — 

degrees plus or minus 3 degrees C; 

(3) Tlim to take, flush, turn to analyze; 

(4) When empty light appears, wait one and 

one half minutes, and balance; 

(§) Set scale pointer on start line; 

i€) Insure observation period requirements 

have been met; 
(?) Turn to take, collect breath sample, and 

turn to analyze; 
(8) Record time; 



(9) When empty light appear s , wait one and 

one half minute s and balance; 

(4-0) Record alcohol concentration. 

If the alcohol concentration is 0.19 or le ss , repeat 
steps (2) through (10) as soon as feasible. — If th e 
alcohol concentration is 0.20 or more, repeat s tep s 
(1) through (10) a s s oon a s feasible. If the alcohol 
concentrations differ by more than 0.02, a third or 
subsequent test shall be administered as soon as 
feasible by repeating steps (1) through (10). 

Statutory Authority as. 20-1 39. 1(b). 

.0315 PREVElVriVE MAINTENANCE: 
BREATHALYZER: MODELS 
900 and 900A 

The — preventive — maintenance — procedures — fef 
Breathalyzer Models 900 and 900A to be followed 
at least once during every 30 days arc: 
{^ Verify appropriate sample chamber out 

put; 

Verify appropriate delivery time; 

Verify appropriate timer cycle (Model 

900 A only); 

Verify that optical system is functioning 

properly; 

Verify instrument thermometer s hows 50 

degrees plus or minu s 3 degrees C; 






^ 



(6) Verify alcoholic breath s imulator thcr 

mometcr s how s proper op>erating temper 
aturc; 

(7) Verify instrumental calibration by oon 

ducting two consecutive alcoholic breath 
simulator tests and record results; 

{%) Verify alcoholic breath simulator solution 

is being changed every 15 day s or after 
25 tests; whichever occurs first. 
A signed original of the preventive maintenance 
checklist shall be kept on file for at least three 
years. 

Statutory Authority G.S. 20-1 39. 1(b). 

.0318 EVTOXIMETER: MODEL 3000 

The operational procedures to be followed in 
using the Intoximetcr, Model 3000 are: 

{V) Insure observation [X i riod requirements 

have been met; 

Insur e alcoholic breath s imulator thcr 



m- 



f^ 



mometcr shows proper operating temper 
aturc and insure s imulator is properly 
connected to in s trument; 

-4 



nsure instrument 
and date; 



display s proper time 



{A) Pres s "START" key and enter appropri 

ate information; 
(5) Insure instrument display s expected re 

suits from the alcoholic breath s imulator; 
(63 When — "SUBJECT BLOW" — appears, 

collect breath sample; 
f7) When — "SUBJECT — BLOW" — appear s , 



f8)- 



rcmovc and 



collect breath s ample; 

When — test — record — ejects, 

record times and results. 
If the alcohol concentrations differ by more than 
0.02, a third or s ub s equent te s t s hall be adminis 
tcrcd as s oon as feasible by repeating steps (1) 
through ( 8 ). 

Statutory Authority G.S. 20-1 39. 1(b). 



.0319 



The- 



PREVENTIVE MAINTENANCE: 
INTOXIMETER: MODEL 3000 



preventive maintenance procedures for the 
Intoximetcr, Model 3000 to be followed at least 
once during every 30 days are: 
(i) Verify alcoholic breath simulator ther - 
mometer shovt-s proper operating temper - 
ature and insure simulator is prof>erly 
connected to instrument; 

(3) Verify instrument displays proper time 

and date; 
0) Press "START" key and enter appropri 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



919 



PROPOSED RULES 



(4)- 



Qtc information; 
Verify — in s trument 



di s plays — exp>ccted 



rcsuita from the aleoholic breath simula 

ten 
iSj Wiiefl — "SUBJECT — BLOW" — appear s , 

collect breath s ample; 
^ When — "SUBJECT — BLOW" — appear s , 

collect breath sample; 
f?) When test — record — ejects, — remove and 

record simulator resulta; 

i^ Repeat s tep s (1) through (7); 

(9^ Verify alcoholie breath s imulator s olution 

i s being changed every 15 days or after 

25 testa, whichever oeeurs first. 
A signed original of the preventive maintenance 
checkli s t s hall be kept on file for at least three 
years. 

Statutory Authority G.S. 20-1 39. 1(b). 

SECTION .0500 - ALCOHOL 
SCREENING TEST DEVICES 



.0503 APPROVED ALCOHOL SCREENING 
TEST DEVICES: CALIBRATION 

(a) The following breath alcohol screening test 
devices are approved as to type and make: 

(1) ALCO-SENSOR (with two-digit dis- 
play), made by Intoximeters, Inc. 

(2) ALCO-SENSOR III (with three-digit 
display), made by Intoximeters, Inc. 

(3) BREATH-ALCOHOL TESTER MOD- 
EL BT-3, made by RepCo., Ltd. 

(4) ALCOTEC BREATH-TESTER, made 
by RepCo., Ltd. 

(5) ALCO-SENSOR IV, manufactured by 
Intoximeters, Inc. 

(6) PBA 3(XX), manufectured by Life Loc, 
Inc. 

(7) SD-2. manufactured by CMI, Inc. 

(b) Calibration of alcohol screening test devices 
shall be verified The agency or operator shall 
verify instrument calibration of each alcohol 
screening test device at least once during each 30 
day period of use^ by employment of a control 
s ample from an aleoholic breath simulator or an 
ethanol gas standard. — The device s hall be deemed 
properly calibrated when a result of 0.10 or 0.09 
is obtained u s ing 10 ml. of stock solution or when 
a result of 0.08 or 0.07 is obtained u s ing 8 ml. of 
stock solution. The verification shall be performed 
by employment of an alcoholic breath simulator 
using simulator solution in accordance with these 
Rules or an ethanol gas canister. 



(1) 



Alcoholic breath simulators used exclu- 



sively to verify instrument calibration 
for calibration of alcohol screening test 
devices shall have the solution changed 
every 30 days or after 25 calibration 
tests, whichever occurs first. 
(2) Requirements of Paragraph (b) and 
Subparagraph (b)(1) of this Rule shall 
be recorded on an alcoholic breath 
simulator log designed by the Injury 
Control Section and maintained by the 
user agency. 

Statutory Authority G.S. 20-16.3. 

TTTLE 16 - DEPARTMENT OF PUBLIC 
EDUCATION 

iSotice is hereby given in accordance with G.S. 
150B-21.2 that the State Board of Education 
intends to amend rule cited as 16 NCAC 6C . 0310. 

1 he proposed effective date of this action is 
January 1. 1995. 

1 he public hearing will be conducted at 9:30 
a.m. on October 10, 1994 at the Education Build- 
ing, 301 N. Wilmington Street, Room 224, Ra- 
leigh, NC 27601-2825. 

ixeason for Proposed Action: Amendment incor- 
porates latest tests for specified content areas. 

K^omment Procedures: Any interested person may 
present w>vvs orally at the hearing or in writing 
through October 17, 1994. 

CHAPTER 6 - ELEMENTARY AND 
SECONDARY EDUCATION 

SUBCHAPTER 6C - PERSONNEL 

SECTION .0300 - CERTIFICATION 

.0310 STANDARD EXAMINATIONS 

(a) The NTE ar e th e standard examinations 
required for initial certification are the PRAXIS 
tests for each area in which a PRAXIS test js 
available. The NTE are the standard examinations 
for all other areas. During the 1994-95 school 
year, persons may optionally take the PRAXIS 
tests at state expense and use those scores for 
certification. The PRAXIS tests are required for 



920 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



persons who take tests after July 1_^ 1995. Persons 
who add an area to their certification must meet 
the test score requirement for that area. 

(1) For formal admission into an approved 
teacher education program, a person 
must score at least 646 on the Commu- 
nication Skills Test and 645 on the 
General Knowledge Test. These re- 
quirements apply to person who have 
not passed these tests by January 1, 
1990. These requirements do not apply 
to persons whose specialty area is 
school social work, school counseling 
or school psychology. The PRAXIS I 



tests are given in two versions. PPST 
or CBT(computer-based) . Passing 
scores for those tests are: 

(A) Reading: 176 PPST; 323 CBT 

(B) Writing: 174 PPST: 320 CBT 

(C) Mathematics: 173 PPST; 318 CBT 

(2) All applicants for initial certification 
must score at least 649 on the Profes- 
sional Knowledge Test. 

(3) Effective July 1, 1994, in addition to 
the Professional Knowledge Test, each 
applicant for initial certification must 
meet minimum teaching area scores as 
follows: 



Specialty Area 

(A) Agriculture 

(B) Art Education 

(C) Audiology 

(D) Biology 

(E) Biology and General Science 

(F) Business Education 

(G) Chemistry 

(H) Chemistry, Physics and General Science 

(I) Early Childhood Education 
(J) Earth/Space Science 

(K) Education in the Elementary School 

(L) Education of the Mentally Retarded 

(M) Educational Leadership: Administration and Supervision 

(N) English Language and Literature 

(O) English Language and Literature (Middle Grades Language Arts) 

(P) French 

(Q) German 

(R) Health Education 

(S) Home Economics Education 

(T) Technology Education 

(U) Introduction to the Teaching of Reading 

(V) Library Media Specialist 

(W) Marketing Education 

(X) Mathematics 

(Y) Mathematics (Middle Grades Mathematics) 

(Z) Music Education 

(AA)Physical Education 

(BB) Physics 

(CC) Reading Specialist 

(DD)School Guidance and Counseling 

(EE) School Psychologist 

(FF) Social Studies 

(GG)Social Studies (Middle Grades Social Studies) 

(HH)Spanish 

(II) Special Education (Cross Categorical) 
(JJ) Speech Communication 

(KK) Speech-Language Pathology 

(LL) Teaching Emotionally Disturbed Students 

(MM)Teaching English as a Second Language 



530 
590 
540 
570 
580 
490 
550 
530 
530 
540 
580 
590 
520 
460 
540 
540 
640 
540 
580 
540 
610 
690 
540 
530 
550 
570 
510 
570 
570 
620 
540 
500 
520 
510 
560 
550 
680 
520 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



921 



PROPOSED RULES 



(NN)Teaching Hearing Impaired Students 650 

(OO)Teaching Learning Disabled Students 610 

(PP) Teaching Visually Handicapped Students 550 

(4) If no teaching area score is possible under Paragraph (a)(3) of this Rule, the Professional 
Knowledge score satisfies the NTE requirement. 

(5) Based on the special nature of the preparation for certification. School Social Workers are 
excluded from NTE regulations and School Psychologists are required to take only the Area 
examination for School Psychologists. 

(b) Instead of the NTE scores an applicant, except a North Carolina approved program graduate at the Class 
A level, may be certified on the basis of the Graduate Record Examinations with minimum scores of 380 on 
the Verbal Ability, 410 on the Quantitative Ability, and 380 on the Analytical Ability examinations. 

(c) PRAXIS scores consist of two or more modules for each test area, the scores of which are added to 



yield a total score. The SBE uses a compensatory score model. 


by which a person may score 


two standard 


errors of measure (SEM) below the validated 


score on individual modules. In th 


s case, the person must score 


higher than the validated score on another module to achieve the total 


required 


score. 














Minimum 


Total 












Module 


Required 












Score 


AieaSMe 


m 


Biology (9-12) 












£A} 


Content knowledge, part 1 








154 




IB) 


Content essays 








139 




IC} 


Pedagogy 








135 


475 


12] 


Chemistry (9-12) 












lA} 


Chemistry: Content knowledge 








150 




IB] 


Physical science: pedagogy 








139 




IQ 


Chemistry: Content essays 








135 


476 


m 


English Language, Literature and 


Composition (9-12) 










(A} 


Content Knowledge 








154 




m 


Essays 








135 




IC) 


Pedagogy 








145 


485 


14} 


Language Arts (6-8) 












lA] 


Content knowledge 








152 




IB] 


Pedagogy 








135 


319 


15} 


Mathematics (9-12) 












lA} 


Content knowledge 








133 




IB} 


Pedagogy 








135 


308 


16} 


Physical Education (K-12) 












lA} 


Content Knowledge 








155 




IB} 


Movement forms, analysis and design 






144 




IQ 


Pedagogy 








None 


324 


01 


Science (6-8) 












lA} 


General science: content essays 








130 




IB} 


Physical science: pedagogy 








139 


311 


18} 


Science (9-12) 












lA} 


General science: content essays 








130 




irn 


Content knowledge. Part 1 








143 




IQ 


Content knowledge. Part 2 








145 


481 


19} 


Social Studies (6-8) 












lA) 


Content knowledge 








158 




IB} 


Analytical essays 








135 


319 


110} 


Social Studies (9-12) 












lA} 


Content knowledge 








158 




IB} 


Interpretation of materials 








167 




(C) 


Analytical essays 








145 


509 



922 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



(11) Spanish (K-12) 

(A) Content knowledge 

(B) Productive Language Skills 



148 
156 



330 



Authority G.S. 115C-12(9)a.; N.C. Constitution. Article IX, Sec. 5. 



TITLE 19A - DEPARTMENT OF 
TRANSPORTATION 

Notice is hereby given in accordance with G.S. 
150B-21.2 that the North Carolina Department of 
Transportation intends to amend rule cited as 19A 
NCAC2B .0603. 

1 he proposed effective date of this action is 
January 1, 1995. 

Instructions on How to Demand a Public Hearing 
(must be requested in writing within 15 days of 
notice): A demand for a public hearing must be 
made in writing and mailed to Emily Lee, Depart- 
ment of Transportation, P.O. Box 25201, Raleigh, 
NC 27611. The demand must be received within 
15 days of this Notice. 

MXeason for Proposed Action: The proposed 
amendment will change the review period required 
by DCn'for commercial driveway permits from 60 
days to four weeks. 

L^omment Procedures: Any interested person may 
submit written comments on the proposed rule by 
mailing the comments to Emily Lee, Department of 
Transportation, P.O. Box 25201, Raleigh. NC 
27611 within 30 days after the proposed rule is 
published or until the date of arty public hearing 
held on the proposed rule, whichever is longer. 

CHAPTER 2 - DIVISION OF 
HIGHWAYS 

SUBCHAPTER 2B - HIGHWAY 
PLANNING 

SECTION .0600 - DRIVEWAY 
EPOTIANCES 

.0603 DRIVEWAY PERMITS FOR 

SPECIAL COMMERCIAL PROPERTY 

(a) Property use designated as special commer- 
cial in Rule .0602 of this Section shall require 
study to a greater depth than other commercial 



property uses due to the possibility of greater 
traffic generation. As a result, a minimum of 60 
days for review four- week review period shall be 
required by the Department. The permit shall be 
submitted sufficiently in advance of the planned 
construction date to allow for this review period. 
The different types of property uses that come 
under this heading are: 

(1) Shopping centers with one or more 
adjoining commercial or service estab- 
lishments planned or constructed; 
Large residential developments; 
Major recreational facilities; 
Large office buildings or complexes 
containing more than 200 parking spac- 
es; 

Hospitals or large medical facilities; 
Large industrial developments; 
Airports; 
Civic Centers; 

Other uses which can be expected to 
attract large amounts of traffic (Average 
Daily Traffic greater than 1,C)(X) vehi- 
cles per day); and 

Any development located at high vol- 
ume or high accident locations, which 
are locations having a history of acci- 
dents, 
(b) In addition to the items required on the 
permit application as specified in Rule .0602 of 
this Section, the following items of information, 
with the exceptions noted, must be shown on the 
site plans before the application can be considered: 
(1) a complete plot plan showing the build- 
ings and parking space layouts (not 
necessary for new public streets); 
the proposed driveway locations and 
widths; 

the approximate distances between the 
following items: 
driveway centerline to centerline of 
nearest crossroad; 

driveway centerline to existing or 
proposed crossovers; 
driveway centerline to adjacent 
streams or bridges; 
pavement edge of road to right of 
way; and 
width of adjacent roads. 



(2) 
(3) 
(4) 



(5) 
(6) 
(7) 
(8) 
(9) 



(10) 



(2) 



(3) 



(A) 



(B) 



(C) 



(D) 



(E) 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



923 



PROPOSED RULES 



(c) In the absence of local zoning or subdivision 
ordinances, the developer shall present four copies 
of the site plans to the District Engineer at least 60 
4&y^ four weeks prior to the planned construction 
date. 

(d) Where local zoning or subdivision ordinanc- 
es exist, the developer shall submit five copies of 
the site plans to the local planning body. The 
local planning body, after tentative approval of the 
plan, shall forward four copies of the plans to the 
Division Engineer. The Division Engineer shall 
take the necessary action and inform the developer 
and the local planning body of the results of the 
investigation conducted by the Department. 



Statutory Authority 
136-89.51. 



as. 136-18(5); 136-89.50; 



TITLE 21 - OCCUPATIONAL 
LICENSING BOARD 

CHAPTER 56 - BOARD OF 

PROFESSIONAL ENGINEERS AND 

LAND SURVEYORS 

ISotice is hereby given in accordance with G.S. 
150B-21.2 that the North Carolina State Board of 
Registration for Professional Engineers & Land 
Surveyors intends to amend rule cited as 21 NCAC 
56.0502. 

1 he proposed effective date of this action is 
December 1, 1994. 

Instructions on How to Demand a Public Hearing 
(must be requested in writing within 15 days of 
notice): A demand for a public hearing must be 
made in writing and mailed to Jerry T. Carter, 
Executive Secretary, N. C. Board of Registration, 
3620 Six Forks Rd. , Ste. 300, Raleigh, NC 27609- 
7197. The demand must be received within 15 
days of this notice. 

Jxeason for Proposed Action: To reflect the 
accurate costs of the Fundamentals of Engineering 
Examination as administered by the North Caroli- 
na Board of Registration. 

i^omment Procedures: Any interested party may 
submit written comments on the proposed amend- 
ment by mailing the comments to Jerry T. Carter, 
Executive Secretary, N.C. State Board of Registra- 



tion, 3620 Six Forks Rd., Ste. 300, Raleigh, NC 
27609-7197, within 30 days of publication of the 
proposed amendment or until the date of any 
public hearing, whichever is longer. 

SECTION .0500 - PROFESSIONAL 
ENGINEER 

.0502 APPLICATION PROCEDURE: 
INDIVIDUAL 

(a) General. A person desiring to become 
licensed as a Professional Engineer must make 
application to the Board on a form prescribed and 
furnished by the Board. 

(b) Request. A request for an appropriate 
application form may be made at the Board ad- 
dress. 

(c) Applicable Forms: 

(1) Student Form. This form requires the 
applicant to set forth his personal histo- 
ry, his educational background, provide 
character references, and furnish a 
photograph for identification purposes. 
The form is for use by those graduat- 
ing, or those having graduated, from an 
engineering curriculum approved by the 
Board as follows: 

(A) Students graduating in the same se- 
mester or quarter in which the funda- 
mentals of engineering examination is 
administered. 

(B) Graduates with less than two years 
since graduation. 

(2) Professional Engineer Form: 

(A) All persons, including comity appli- 
cants and graduates of an engineering 
curriculum approved by the Board 
with more than two years progressive 
engineering experience, shall apply 
for registration by using the Profes- 
sional Engineer form. The submis- 
sion of this form will signify that the 
applicant seeks registration, and will 
result in seating for each examination 
required, when the applicant is so 
qualified. This form requires the 
applicant to set forth his personal and 
educational background, his engineer- 
ing experience and his character 
references. A passf)ort-type photo- 
graph for identification purposes is 
required. 

(B) Persons who have previously complet- 
ed the fundamentals examination by 
use of the Student Form will submit 



924 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



PROPOSED RULES 



the Professional Engineer Form to 
request registration when qualified to 
take the final eight-hour examination. 

(3) Supplemental Form. Persons who 
initially applied for the fundamentals of 
engineering exam using the Professional 
Engineer form must supplement their 
initial application upon applying for the 
principles and practice examination. 
The supplemental form requires that 
engineering experience from the date of 
the initial application until the date of 
the supplemental application be listed. 
Five references shall be submitted 
which are current to within one year of 
the examination date. 

(4) Reference Forms: 

(A) Persons applying to take the examina- 
tion for fundamentals of engineering 
must submit to the Board names of 
three individuals who are familiar 
with the applicant's work, character 
and reputation. One of these individ- 
uals must be registered as a Profes- 
sional Engineer. Persons applying to 
take the examination for principles 
and practices of engineering must 
submit to the Board names of five 
individuals who are familiar with the 
applicant's work, character and repu- 
tation. Two of these individuals must 
be registered Professional Engineers. 

(B) In addition to the applicant submitting 
names to the Board of individuals 
familiar with the applicant's work, 
character and reputation, those indi- 
viduals listed are required to submit 
to the Board their evaluation of the 
applicant on forms supplied them by 
the applicant. Such information is 
considered confidential and will not 
be released by the Board. 

(C) The reference form requires the indi- 
vidual evaluating the applicant to state 
the evaluating individual's profession, 
his knowledge of the applicant and to 
state other information concerning the 
applicant's engineering experience, 
character and reputation. 

(D) The reference forms will be received 
by the applicant when he receives his 
application. The reference forms are 
then to be distributed by the applicant 
to the persons listed by him on his 
application as references. It is the 



applicant's responsibility to see that 
the individuals listed as references 
return the reference forms to the 
Board prior to the filing deadline for 
the examination. 

(d) Fees: 

(1) Student Form. The examination fee for 
applicants applying for examination on 
the fundamentals of engineering using 
the student form is payable with the 
filing of the application. Once the 
applicant passes the examination on the 
fundamentals of engineering, the regis- 
tration fee of one hundred dollars 
($100.00) and the examination fee for 
the principles and practice of 
engineering examination is payable with 
the applicant's subsequent application 
for registration as a Professional 
Engineer using the Professional 
Engineer form. 

(2) Professional Engineer Form. The 
registration fee of one hundred dollars 
($100.00) and appropriate examination 
fee for applicants applying for the 
examination on the fundamentals of 
engineering or the principles and 
practice of engineering using the 
Professional Engineer form is payable 
with the filing of the application. 

(3) Comity. The registration fee of one 
hundred dollars ($100.00) for applicants 
for comity registration is payable with 
the filing of the application. 

(4) Examination. The examination fee for 
any applicant is payable with the filing 
of the application in accordance with 
the following schedule: 

(A) Engineering Fundamentals - $30.00 
40.00 

(B) Engineering Principles & Practice - 
$70.00 

(e) The Board will accept the records maintained 
by the National Council of Examiners for 
Engineering and Surveying (NCEES) as evidence 
of registration in another state. 

Statutory Authority G.S. 89C-10; 89C-13; 89C-14. 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



925 



LIST OF RULES CODIFIED 



1 he List of Rules Codified is a listing of rules that were filed with OAH in the month indicated. 


Ixey: 




Citation 


= Title, Chapter, Subchapter and Rule(s) 


AD 


= Adopt 


AM 


= Amend 


RP 


= Repeal 


With Chgs 


= Final text differs from proposed text 


Corr 


= Typographical errors or changes that requires no rulemaking 


Eff. Date 


= Date rule becomes effective 


Temp. Expires 


= Rule was filed as a temporary rule and expires on this date or 180 days 



NORTH CAROLINA ADMESflSTRATTVE CODE 
AUGUST 94 



[TLE 


DEPARTMENT 


4 


Commerce 


10 


Human Resources 


11 


Insurance 


12 


Justice 


13 


Labor 


15A 


Environment, Health, and 




Natural Resources 



TITLE DEPARTMENT 

19A Transportation 

21 Occupational Licensing Boards 

10 - Chiropractic Examiners 
32 - Medical Examiners 
42 - Examiners in Optometry 
50 - Plumbing and Heating Contractors 
58 - Real Estate 
65 - Therapeutic Recreation Certification 



Citation 


AD 


AM 


RP 


With 
Chgs 


Corr 


Eff. 
Date 


Temp. 
Expires 


4 NCAC 12C .0007 




/ 








08/16/94 




10 NCAC 3R .0305 




/ 








08/12/94 


180 DAYS 


3U .1717 










/ 






14K .0365 




/ 




/ 




09/01/94 




18F .0312 




/ 








09/01/94 




.0313 




/ 




/ 




09/01/94 




.0314 




/ 








09/01/94 




.0315 




/ 




/ 




09/01/94 




.0316 - .0317 




/ 








09/01/94 




.0318 




/ 




/ 




09/01/94 




.0319 - .0320 




/ 








09/01/94 




.0321 


/ 






/ 




09/01/94 







926 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



LIST OF RULES CODIFIED 





Citation 


AD 


AM 


RP 


With 
Chgs 


Corr 


Eff. 
Date 


Temp. 
Expires 


10 NCAC 18F .0322 -.0323 


• 










09/01/94 




42R .0201 




/ 








07/27/94 


180 DAYS 


SOB .0313 




/ 








09/01/94 




.0314 


/ 










09/01/94 




.0407 




/ 








09/01/94 




11 NCAC 12 .0436 




/ 








09/01/94 




12 NCAC 93 .0208 




/ 




/ 




01/01/95 




13 NCAC 7F .0201 










/ 






ISA NCAC IJ .0601 




/ 








09/01/94 




2B .0306 




/ 




/ 




09/01/94 




.0309 




/ 




/ 




09/01/94 




.0311 




/ 




/ 




09/01/94 




2D .OS 18 




• 




/ 




09/01/94 




2E .0107 




/ 








09/01/94 




.0301 




/ 




/ 




09/01/94 




.0401 


/ 






/ 




09/01/94 




.0402 


/ 










09/01/94 




30 .0301 - .0310 


/ 










08/09/94 


180 DAYS 


lOD .0003 




/ 




/ 




09/01/94 




lOH .0403 - .0407 






/ 






09/01/94 




11 .0104 




/ 








08/20/94 


180 DAYS 


.0117 




/ 








08/20/94 


180 DAYS 


.0343 




/ 








08/20/94 


180 DAYS 


.03S0- .03S1 




/ 








08/20/94 


180 DAYS 


.03S6 - .0357 


/ 










08/20/94 


180 DAYS 


.0502- .0515 




/ 








08/20/94 


180 DAYS 


.0517 - .0520 




/ 








08/20/94 


180 DAYS 


.0521 - .0523 


/ 










08/20/94 


180 DAYS 


.1625 




/ 








08/20/94 


180 DAYS 


18A .2645 










/ 






18C .0502 










/ 






.0715 










/ 






.0805 










/ 









9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



927 



UST OF RULES CODIFIED 





Citation 


AD 


AM 


RP 


With 
Chgs 


Corr 


Eff. 
Date 


Temp. 
Expires 


15A NCAC 18C .1406 










/ 






19A .0502 




/ 








10/01/94 


180 DAYS 


19A NCAC 2B .0221 




/ 








09/01/94 




2D .0607 




/ 




/ 




10/01/94 




2E .0218 




/ 








09/01/94 




21 NCAC 10 .0303 


/ 






/ 




09/01/94 




32M .0006 




/ 








09/01/94 




42A .0001 




/ 








10/01/94 




42C .0002 




/ 








10/01/94 




.0004 




/ 








10/01/94 




.0005 




/ 








10/01/94 




42J .0001 




/ 








10/01/94 




50 .0306 




/ 




/ 




09/01/94 




.1104 


/ 










09/01/94 




58A .0104 




/ 




/ 




07/01/95 




.0112 




/ 




/ 




07/01/95 




65 .0002 




/ 








09/01/94 





l( 



928 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



RRC OBJECTIONS 



1 he Rules Review Commission (RRC) objected to the following rules in accordance with G.S. 
143B-30.2(c). State agencies are required to respond to RRC as provided in G.S. 143B-30.2(d). 



COMMERCE 

Energy 

4 NCAC 12C .0007- Institutional Conservation Program 
Rule Returned to Agency 
Agency Filed Rule for Codification Over RRC Objection 

CRIME CONTROL AND PUBLIC SAFETY 

State Highway Patrol 

14A NCAC 9H .0305 - Rotation, Zone, Contract, and Deviation from System 
Agency Revised Rule 

ENVIRONMENT, HEALTH, AND NATURAL RESOURCES 

Departmental Rules 

15 A NCAC IJ .0303 - Filing of Required Supplemental Information 

Agency Revised Rule 
15A NCAC IJ .0701 - Public Necessity: Health: Safety and Welfare 

Agency Revised Rule 

Agency Revised Rule 

Wildlife Resources and Water Safety 

15A NCAC 101 .0001 - Definitions and Procedures 

HUMAN RESOURCES 

Childrens Services 

10 NCAC 411 .0306 - When Abuse, Neglect or Dependency is Found 

Agency Revised Rule 
10 NCAC 41J .0501 - When to Complete a Risk Assessment 

Agency Revised Rule 

Facility Services 

10 NCAC 3D .0913 - Permit 
Agency Revised Rule 

JUSTICE 

Criminal Information 

12 NCAC 4E .0402 - Certification and Recertification ofDCI Operators 



RRC Objection 06/16/94 

07/14/94 

Eff. 08/16/94 



RRC Objection 07/14/94 
Obj. Removed 07/14/94 



RRC Objection 
Obj. Removed 
RRC Objection 
RRC Objection 
Obj. Removed 



06/16/94 
06/16/94 
06/16/94 
06/16/94 
07/14/94 



RRC Objection 08/18/94 



RRC Objection 07/14/94 

Obj. Removed 07/14/94 

RRC Objection 07/14/94 

Obj. Removed 07/14/94 



RRC Objection 07/14/94 
Obj. Removed 07/14/94 



RRC Objection 07/14/94 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



929 



RRC OBJECTIONS 



Agency Revised Rule 

Criminal Justice Education and Training Standards 

12 NCAC 9B .0203 - Admission of Trainees 

Agency Revised Rule 
12 NCAC 9B .0208 - Basic Training - Probation/Rirole Officers 

LICENSING BOARDS AND COMMISSIONS 

Acupuncture Licensing Board 

21 NCAC 1 .0102 - Req./Vbiver /Qualifications /Licensure Detailed/G.S. 90-455 
Agency Revised Rule 

Therapeutic Recreation Certification 

21 NCAC 65 .0004 - Academic - TRS Examination 

TRANSPORTATION 

Division of Motor Vehicles 

19A NCAC 3B .0703 - Requirements for Third Rirty Testers 

Agency Revised Rule 
19A NCAC 31 .0501 - Requirements 

Rule Withdrawn by Agency 

Agency Re-Submits Rule 

Agency Revised Rule 
19A NCAC 3J .0501 - Requirements 

Agency Rexised Rule 



Obj. Removed 07/14/94 



RRC Objection 07/14/94 
Obj. Removed 07/14/94 
RRC Objection 07/14/94 



RRC Objection 07/14/94 
Obj. Removed 07/14/94 



RRC Objection 08/18/94 



RRC Objection 07/14/94 

Obj. Removed 07/14/94 

06/16/94 

RRC Objection 07/14/94 

Obj. Removed 07/14/94 

RRC Objection 07/14/94 

Obj. Removed 07/14/94 



930 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



CONTESTED CASE DECISIONS 



1 his Section contains the full text of some of the more significant Administrative Law Judge decisions 
along with an index to all recent contested cases decisions which are filed under North Carolina 's 
Administrative Procedure Act. Copies of the decisions listed in the index and not published are available 
upon request for a minimal charge by contacting the Office of Administrative Hearings, (919) 733-2698. 



AGENCY 



CASE 
NUMBER 



ALJ 



BATE OF 
DECISION 



PUBLISHED DECISION 
REGISTER CITATION 



ADMINISTRATION 

North Carolina Council for Women 

Fanuly Violence Prevention Services v. N.C. Council for Women 

ALCOHOLIC BEVERAGE CONTROL COMMISSION 

Jerry Lee McGowan v. Alcoholic Beverage Control Comm. 

Alcoholic Beverage Control Comm. v. Entertainment Group, Inc. 

Rayvon Stewart v. Alcoholic Beverage Control Commission 

Alcoholic Beverage Control Comm. v. Branchland, Inc. 

Alcoholic Beverage Control Comm. v. Peggy Sutton Waltere 

Russell Bemaid Speller d/b/a Cat's Disco v. Alcoholic Bev Ctl Comm. 

Alcoholic Beverage Control Comm. v. Branchland, Inc. 

Ednaid Ogunjobi, Club Piccadilli v. Alcoholic Beverage Control Comm. 

Robert Kovalaske, Nick Pikoulas, Joseph Marehbum, Evangelos Pikoulas, 

d/b/a Our Mom's BBQ v. Alcoholic Beverage Control Commission 
Christine Geoige Williams v. Alcoholic Beverage Control Comm. 
Lynn Ann Garfagna v. Alcoholic Beverage Control Commission 
Alcoholic Beverage Control Comm. v. Raleigh Limits, Inc. 
Alcoholic Beverage Control Comm. v. COLAP Enterprises, Inc. 
Alcoholic Beverage Control Comm. v. Mitch's Tavern, Inc. 
Alcoholic Beverage Control Comm. v. Ms. Lucy Jarrcll PdwcU 
Alcoholic Beverage Control Comm. v. Daphne Ann Harrell 
Mr. & Mrs. Josh Bullock Jr. v. Alcoholic Beverage Control Comm. 
Jerome Crawford v. Alcoholic Beverage Control Commission 
Lawrence Mungin v. Alcoholic Beverage Control Commission 
Alonza Mitchell v. Alcoholic Beverage Control Commission 
Roy Dale Cagle v. Alcoholic Beverage Control Commission 

COMMERCE 



94 DOA 0242 



West 



04/13/94 



93 ABC 0363 


Morrison 


08/23/94 




93 ABC 0719 


Gray 


03/02/94 




93 ABC 0793 


Ncsnow 


04/11/94 




93 ABC 0892 


Morgan 


06/03/94 




93 ABC 0906 


Mann 


03/18/94 




93 ABC 0937 


Morrison 


03/07/94 




93 ABC 0993 


Morgan 


06/03/94 




93 ABC 1024 


West 


03/03/94 




93 ABC 1029 


Gray 


03/04/94 




93 ABC 1057 


Bee ton 


04/21/94 




93 ABC 1481 


Gray 


07/19/94 




93 ABC 1485 


Mann 


03/11/94 




94 ABC 0060 


Nesnow 


06/07/94 




94 ABC 0064 


Gray 


07/26/94 




94 ABC 0070 


Morgan 


06/06/94 




94 ABC 0115 


Ncsnow 


07/18/94 




94 ABC 0124 


Morgan 


06/06/94 




94 ABC 0125 


Morgan 


06/06/94 




94 ABC 0149 


Chess 


08/08/94 




94 ABC 0257 


Morrison 


07/28/94 


9:11 NCR 870 


94 ABC 0260 


West 


07/13/94 





Sa^4ngs Institutions Division 

James E. Byers, et al v. Savings Institutions 

CORRECTION 

Division of Prisons 

Gene Strader v. Department of Correction 

CRIME CONTROL AND PUBLIC SAFETY 



93 COM 1622 Chess 



03/01/94 



94 DOC 0252 Morrison 03/21/94 



Joseph Guernsey & Parents, Robert Guernsey & Dolores Guernsey 
v. Pitt County Hospital Eastern Radiologists 

Crime Victims Compensation Commission 

Mae H. McMillan v. Crime Victims Compensation Commission 
James Hugh Baynes v. Crime Victims Compensation Commission 
Ross T. Bond v. Victims Compensation Commission 
James A. Canady v. Crime Victims Compensation Commission 
Virginia Roof v. Department of Crime Control & Public Safety 
Karcn C. Tilghman v. Crime Victims Compensation Commission 



94CPS 0413 



Gray 



07/11/94 



92 CPS 1328 


Morgan 


08/11/94 






93 CPS 0801 


West 


03/28/94 


9:2 NCR 


114 


93 CPS 1104 


West 


04/21/94 






93 CPS 1108 


Gr^ 


03/28/94 






93 CPS 1347 


Nesnow 


03/24/94 






93 CPS 1608 


Reilly 


05/17/94 


9:6 NCR 


407 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



931 



CONTESTED CASE DECISIONS 



AGENCY 



Rosemary Taylor v. Crime Viclims Compensation Commission 

Violet E. Kline v. Crime Victims Compensation Commission 

James Benton v. Crime Victims Compensation Commission 

Percy Clark v. Crime Victims Compensation Commission 

J. Richard Spencer v. Crime Victims Compensation Commission 

Albert H. Walker v. Crime Victims Compensation Commission 

Barbara Henderson v. Crime Victims Compensation Commission 

Shiriey Handsome v. Crime Victims Compensation Commission 

Georgcann Young v. Crime Victims Compensation Commission 

Lawrence L. Tyson v. Crime Victims Compensation Commission 

Ada Battle v. Crime Victims Compensation Commission 

Lyman L. Chapman v. Crime Victims Compensation Commission 

Douglas and Virginia Wilson v. Crime Victims Compensation Comm. 

Michelle L. Wilcox v. Crime Victims Compensation Commission 

Michael G. Low v. Crime Victims Compensation Commission 

James R. Gray v. Crime Victims Compensation Commission 

Hazel Jarvis v. Victims Compensation Commission 

Mary E. Haskins v. Crime Victims Compensation Commission 



CASE 




DATE OF 


NUMBER 


ALJ 


DECISION 


93 CPS 1626 


Nesnaw 


05/25/94 


93 CPS 1670 


Morgan 


06/13/94 


94 CPS 0034 


Chess 


06/14/94 


94 CPS 0127 


Rellly 


04/19/94 


94 CPS 0157 


Chess 


06/14/94 


94 CPS 0229 


Reilly 


08/11/94 


94 CPS 0259 


Morrison 


04/07/94 


94 CPS 0286 


Gray 


04/28/94 


94 CPS 0292 


Reilly 


04/18/94 


94 CPS 0368 


Gray 


04/26/94 


94 CPS 0414 


Reilly 


08/23/94 


94 CPS 0415 


Chess 


06/02/94 


94 CPS 0417 


Reilly 


06/07/94 


94 CPS 0467 


Reilly 


06/07/94 


94 CPS 0524 


Morrison 


06/13/94 


94 CPS 0603 


Reilly 


08/19/94 


94 CPS 0664 


Chess 


07/29/94 


94 CPS 1406 


Gray 


03/17/94 



PUBLISHED DECISION 
REGISTER CITATION 



EMPLOYMENT SECURITY COMMISSION 



David Lee Bush v. Emplcyment Security Commission 
ENVIRONMENT. HEALTH. AND NATURAL RESOURCES 



91 ESC 0395 



Reilly 



08/18/94 



BobVy Stallings v. Environment, Health, and Natural Resources 
William P. Shaver. R. McKinnon Morrison ID, Till Ray, Dr. Wesley 

C. Ray, Douglas W. Furr, Catherine H. f^irr & Caldwell Creek Farm, Inc. 

V. EHNR-Slate of North Carolina 
Ron D. Graham, Suzanne C. Graham v. Robert Cobb, Mecklenbuig Cty 
Patricia D. Solomon v. Macon County Health Department 
Elbert L. Wmslow v. EHNR/Guilfoni Cly Health Dept. & Guilford Cly 

Planning & Zoning Board 
Kathryn A. Whitl*^ v. Macon County Health Department 
Brook Hollow Estates v. Environment, Health, & Natural Resources 
Oceanfront Court, David C. Gagnon v. Environment, Health, & Nat. Res. 
Sam's Club ^219 v. Mecklenbuig County Health Department 
Eugene Crawford &. Nancy P. Crawford v. Macon County Health Dept. 
Tri-Circuits, Inc. v. Environment, Health, & Natuial Resources 



90 EHR 0612 


Morgan 


08/11/94 


93 EHR 0452 


Morgan 


08/11/94 


93 EHR 1017 


Becton 


05/31/94 


93 EHR 1777 


West 


05/23/94 


94 EHR 0086 


Chess 


07/13/94 


94 EHR 0088 


West 


07/13/94 


94 EHR 0093 


West 


06/03/94 


94 EHR 0210 


Chess 


06/21/94 


94 EHR 0329 


Nesnow 


06/15/94 


94 EHR 0500 


Gray 


06/10/94 


94 EHR 0601 


Morrison 


06/30/94 



9:7 NCR 496 



Coastal Management 

Roger Foiiler v. EHNR. Div. of Coastal Mgml &. Environmental Mgmt 
Roger Fuller v. EHNR. Div. of Coastal Mgmt & Environmental Mgmt 
John R. Hooper v. EHNR. Div./Coastal Mgml & Bird's Nest I^rtnership 
Gary E. Montalbine v. Division of Coastal Management 
Paley-Midgett F^rtnecship v. Coastal Resources Commission 



89 EHR 1378^ 


Gray 


04/07/94 


90 EHR 0017* 


Gr^ 


04/07/94 


90 EHR 0455 


Morg:an 


08/11/94 


93 EHR 1792 


Nesncw 


03/21/94 


94 EHR 0315 


Gray 


06/01/94 



Enyironmental Heahh 



Jane C. O'Malley. Melvin L. Cartwright v. EHNR & District Hlth Dept 

f^quotank-P;rquimans-Camden-Chowan 
Henry Lee Bulluck v. Nash County Health Department & EHNR 
Environment. Health, &. Natural Res. v. Clark Harris & Jessie Lee Harris 
Richard F Ebersold v. Jackson County Health Department & EHNR 
Sidney S. Tate Jr. v. Dept. of Environment, Health. & Natural Resources 
George A Waugh. Shirley A. Waugh v. Carteret Cty Health & Env. Hlth 
Scotland Water Co., Laurin Lakes v. Environment. Health, & Nat. Res. 
H.A. Lenlz v. Department of Environment, Health, & Natural Resources 
Hcyd Bean Wdliams v. Dept. of Environment, Health, & Nat. Res. 



91 EHR 0838 


Bee ton 


04/06/94 


93 EHR 0348 


Morgan 


07/22/94 


93 EHR 0924 


Bee Ion 


03/03/94 


93 EHR 1391 


Chess 


06/24/94 


94 EHR 0005 


Reilly 


05/24/94 


94 EHR 0128 


Chess 


07/13/94 


94 EHR 0200 


Nesnaw 


04/27/94 


94 EHR 0235 


Nesnow 


07/19/94 


94 EHR 0333 


Reilly 


05/18/94 



" Consolidated Cases. 



932 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



CONTESTED CASE DECISIONS 



AGENCY 



CASE 
NUMBER 



ALJ 



DATE OF 
DECISION 



PUBLISHED DECISION 
REGISTER CITATION 



Envimnmental Management 

David Springer v. Dept. of Environment, Health, & Natural Resouices 
Petroleum Installation Equipment Co. , Inc. v. Env., Health & Nat. Res. 
Jack GrifEn v. Dept. of Environment, Health, and Natural Resouicee 



92 EHR 1797 


Morgan 


05/19/94 


93EHR0531 


Chess 


03/21/94 


93 EHR 1030 


Bee ton 


03/21/94 



Land Resources 

Wallace B. Clayton, Dr. Marshall Redding v. Div. of Land Resources 
Town of KenieiBville (LQS 93-053) v. Environment, Health, & Nat. Res. 
Royce Perry, Paul Perry v. Dept. of Environment, Health, & Natural Res. 

Marine Fisheries 

Robert I. Swinson, Virginia S. Swinson v. EHNR, Div/Marine Fisheries 

Larry J. Batson v. Division of Marine Fisheries 

David W. Oglesby v. Division of Marine Fisheries 

David E. Oglesty v. Division of Marine Fisheries 

James Goodman v. EHNR, Division of Marine Fisheries 

Billy Ervin Burton v. Division of Marine fisheries 

SoHd Waste Management 

Roger Sessoms v. EHNR/ Asbestos Hazard Management Branch 
Bertie Citizens Action Coalition, Inc.; Willaid J. Oliver, Reginald Early, 
Herbert Jenkins, Jr., Lindwood Earl Tripp, Willie Warren Tripp, Mary 
Alice Cherry, and Kathy Burden v. EHNR, Solid Waste Management 
Division, and East Carolina Environmental, Inc., Addington Environmental 
Inc., et al. 
Bobty Benton v. EHNR & Division of Solid Waste 



93 EHR 1407 


Morgan 


08/09/94 




93 EHR 1781 


Chess 


06/29/94 


9:8 NCR 58 


94 EHR 0525 


Gray 


07/01/94 





93 EHR 0394 


Gray 


04/11/94 




93 EHR 0857 


Morgan 


07/22/94 




93 EHR 0930^* 


West 


07/25/94 


9:10 NCR 758 


93EHR0931*« 


West 


07/25/94 


9:10 NCR 758 


94 EHR 0035 


Nesnow 


07/18/94 


9:9 NCR 660 


94 EHR 0504 


Nesnow 


09/01/94 





93 EHR 0951 
93 EHR 1045 



94 EHR 0442 



Gray 
Morrison 



Gray 



03/28/94 
04/06/94 



08/22/94 



9:3 NCR 214 



HUMAN RESOURCES 



Jerome Triplin v. Department of Human Resources 

Helen J. Walls, Walls Young World v. Department of Human Resources 

Brenda C. Robinson v. Department of Human Resources 

Betty Rhodes v. Department of Human Resources 

Distribution Child Support 

Mona L. Stanback v. DHR, Div/Social Svcs, Child Support Enf. Section 
Jachell D. Parker v. Department of Human Resources 

Division of Child Development 

Judith Fridl^' v. Div. of Child Develop me nt/ A buse/N^lect Unit 

DHR, Division of Child Development v. Joyce Gale 

Laurcen Holt, ID;S'26-0-00037 v. DHR, Div. of Child Development 

Gloria C. Haith v. Department of Human Resources 

Gloria C. Haith v. D^carc Consultant 

Charles E. Smith v. Department of Human Resources 

Scott's Lwing Day Care & Nuisery, Mrs. Willie L. Scott v. DHR 

Belinda K. Mitchell v. Human Resources, Div. of Child Development 

Living Wond Day Care, Jonathan Lankfoid v. Dept. of Human Resources 

Facility Services 

Laura Harvey Williams v. DHR, Division of Facility Services 

Presbyterian-Orthopaedic Hospital v. Department of Human Resources 

Judy Hoben Wallace v. Department of Human Resources 

Lowell Stafford v. Department of Human Resources 

Mr. & Mrs. Aivin Wilson v. DHR, Division of facility Services 



93 DHR 0108 


Reilly 


08/19/94 


93 DHR 0965 


Morgan 


08/11/94 


94 DHR 0365 


West 


06/01/94 


94 DHR 0501 


Morrison 


06/02/94 



93 DCS 0969 
93 DCS 0371 



Morgan 
Morgan 



08/02/94 
07/14/94 



93 DHR 0973 


Morrison 


03/08/94 


93 DHR 1344 


Gray 


04/28/94 


93 DHR 1549 


Becton 


07/13/94 


93 DHR 1707 


Nesnow 


03/22/94 


93 DHR 1787 


Nesnow 


03/14/94 


93 DHR 1797 


Nesnow 


03/21/94 


94 DHR 0106 


Nesnow 


06/29/94 


94 DHR 0119 


Reilly 


06/30/94 


94 DHR 0168 


Nesnow 


03/23/94 



93 DHR 0391 


Morgan 


08/11/94 


93 DHR 0805 


Reilly 


03/11/94 


93 DHR 0935 


Gray 


05/23/94 


93 DHR 1381 


Gray 


04/15/94 


94 DHR 0559 


Chess 


08/25/94 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



933 



CONTESTED CASE DECISIONS 



AGENCY 



CASE 
NUMBER 



AU 



DATE OF 
DECISION 



PUBLISHED DECISION 
REGISTER CITATION 



Certijicaie of Need Section 

Charles E. Hunter, Jr.. M.D. & Coastal Perfusion Svcs, Inc. v. 

Department of Human Resources, and Wilmington Perfusion 

Corp. and Howaid F. Marks, Jr., M.D. 
Cape Fear Memorial Hospital v. Department of Human Resources 
The Carrolton of Fayetleville> Inc. v. Department of Human Resources 

and 
Highland House of Fayettevillc, Inc. &. Richard R. Allen Sr. v. DHR 
The Carrolton of f^etteville. Inc. v. Department of Human Resources 

and 
Highland House of Fayettevillc, Inc. & Richard R. Allen Sr. v. DHR 

Division of Medical Assistance 

J.R., by and through her agent & Pereonal Rep., Hank Neal v. DHR 
N.R. by &. through her agt & personal rep E.C.J, v. DHR, Medical Assis. 
David Yott v. Department of Human Resources 

Division of Medical Assistance v. Catawba Cty Dept. of Social Services 
Lu Ann Leidy, MD/Dorothea Dix Hosp. Child & \buth v. Medical Assis. 

Division of Social Services 



93 DHR 0746 Morgan 04/11/94 



93 DHR 1552 Reilly 08/15/94 

94 DHR 0197*^ Morgan 08/11/94 



94 DHR 0198** Morgan 08/11/94 



93 DHR 0528 


Gray 


04/27/94 


93 DHR 0538 


Chess 


07/01/94 


93 DHR 1113 


Gray 


04/05/94 


93 DHR 1778 


West 


03/04/94 


94 DHR 0448 


Chess 


06/21/94 



Evelyn Moorc v. Department of Human Resources 

Nathaniel HarrtU, Annie Harrell v. Department of Social Services 

Child Support Enforcement Section 

Alfred Bennett v. Department of Human Resources 

Shellon Staples v. Department of Human Resources 

Helen Lee Harvell Jones v. Department of Human Resources 

Dalton Felton Sr v. Department of Human Resources 

Colty S. Hughes v. Department of Human Resources 

Gary Eugene Honeycutt v. Department of Human Resources 

Vicki C. Conn v. Department of Human Resources 

Melvin L. Miller Sr. v. Department of Human Resources 

Robert L. Hicks v. Department of Human Resources 

Darryl D. Leedy v. Department of Human Resources 

William Heckstall v. Department of Human Resources 

Luther Hatcher v. Department of Human Resources 

Bryan Jeffrey Cole v. Department of Human Resources 

Anthory E. BuUaid v. Department of Human Resources 

Donald E. Height v. Department of Human Resources 

Dexter L. Chambers v. Department of Human Resources 

Ronald E. Johnson v. Department of Human Resources 

Roger Moore v. Department of Human Resources 

Alvin Lee Martin v. Department of Human Resources 

Robert Young v. Department of Human Resources 

Henry M. Dillard v. Department of Human Resources 

Vernon Byrd v. Department of Human Resources 

Antonio Townsend v. Department of Human Resources 

Keith M. Gr^ v. Department of Human Resources 

Troy E. Pinkn^ v. Department of Human Resources 

Anlhor^ A. Macon v. Department of Human Resources 

Walter Lee Corbett v. Department of Human Resources 

Joseph E. Kemsline v. Department of Human Resources 

Alvin M. Davis v. Department of Human Resources 

Thomas M. Birdwell DI v. Department of Human Resources 

Joe Louis Mayo v. Department of Human Resources 

Bobty Lewis Smith v. Department of Human Resources 

Louis C. Cade v. Department of Human Resources 

Richard J. Swarm v. Department of Human Resourx^es 

Nash Andrew Newsome v. Department of Human Resources 

James E. Watson v. Department of Human Resources 

Robert Lee Barrett v. Department of Human Resources 

Betty A. Williams, Fred E. Jones v. Department of Human Resources 

Jeff A. Taylor v. Department of Human Resources 

Eric G. Sykes v. Department of Human Resources 



94 DHR 0293 
94 DHR 0440 



Reilly 
Gray 



04/15/94 
06/27/94 



90CSE 1146 


Morgan 


08/11/94 


9 1 CSE 0660 


Morgan 


08/11/94 


91 CSE 1183 


Moigan 


08/11/94 


92 CSE 0532 


Morgan 


07/13/94 


92 CSE 1199 


Moigan 


08/10/94 


92 CSE 1207 


Morgan 


08/10/94 


92 CSE 1268 


Morgan 


08/10/94 


92 CSE 1372 


Morgan 


08/10/94 


92 CSE 1591 


Morgan 


08/10/94 


93 CSE 0591 


Morgan 


08/11/94 


93 CSE 1077 


Reilly 


03/14/94 


93 CSE 1082 


Mann 


05/24/94 


93 CSE 1091 


Bccton 


03/30/94 


93 CSE 1094 


Nesnow 


06/13/94 


93 CSE 1110 


Morgan 


08/11/94 


93 CSE 1 124 


West 


03/28/94 


93 CSE 1125 


Bee ton 


03/30/94 


93 CSE 1127 


Becton 


04/14/94 


93 CSE 1128 


Nesncw 


04/04/94 


93 CSE 1133 


Reilly 


04/18/94 


93 CSE 1135 


Nesnow 


06/13/94 


93 CSE 1136 


Becton 


08/22/94 


93 CSE 1139 


Becton 


03/30/94 


93 CSE 1140 


Nesnow 


06/28/94 


93 CSE 1148 


Mann 


03/29/94 


93 CSE 1149 


Gray 


04/26/94 


93 CSE 1150 


Reilly 


03/30/94 


93 CSE 1151 


Morgan 


07/15/94 


93 CSE 1152 


Moigan 


08/04/94 


93 CSE 1155 


Morgan 


08/02/94 


93 CSE 1161 


West 


04/19/94 


93 CSE 1162 


Nesnow 


06/16/94 


93 CSE 1166 


Morrison 


06/16/94 


93 CSE 1167 


Reilly 


06/17/94 


93 CSE 1170 


Mann 


03/17/94 


93 CSE 1171 


Gray 


04/26/94 


93 CSE 1172 


Morrison 


04/20/94 


93 CSE 1178 


Nesnow 


04/20/94 


93 CSE 1180 


Morgan 


07/15/94 


93 CSE 1181 


Becton 


04/20/94 



934 



9:12 



NORTH CAROUNA REGISTER 



September 15, 1994 



CONTESTED CASE DECISIONS 



AGENCY 



Morris Ray Bethel v. Department of Human Resources 
Willie C. Hollis v. Department of Human Resources 
Ernest N. Pniitt Jr. v. Department of Human Resources 
Michael P. McCay v. Department of Human Resources 
Robert Matthew Rossi v. Department of Human Resources 
Bemadett^ Cook v. Department of Human Resources 
Rawan Weigel v. Department of Human Resources 
Lem PeiBon v. Department of Human Resources 
Bobty Lee McCulleis Jr. v. Department of Human Resources 
Randall R. Rhodes v. Department of Human Resources 
Glen Nelson Washington v. Department of Human Resources 
Michael V. Dockery v. Department of Human Resources 
FIcyd E. Bail^ v. Department of Human Resources 
Dennis W. Nolan v. Department of Human Resources 
Robert Calvin Connor v. Department of Human Resources 
James D. Williams v. Department of Human Resources 
Mahalon Eugene White v. Department of Human Resources 
Marty Franzen v. Department of Human Resources 
Vaughn D. Peaisall v. Department of Human Resources 
Gerald L. Murrcll v. Department of Human Resources 
Larry D. Dawson v. Department of Human Resources 
McDaniel Teeter Jr. v. Department of Human Resources 
King D. Graham v. Department of Human Resources 
Derek Watson v. Department of Human Resources 
Luther Boiden v. Department of Human Resources 
Walter B. Lester v. Department of Human Resources 
William K. Whisenant v. Department of Human Resources 
Stanley J. Foreack v. Department of Human Resources 
Larry Cornelius Smith v. Department of Human Resources 
Robert C. Lee Jr. v. Department of Human Resources 
Sidn^ Ray Tuggle Jr. v. Department of Human Resources 
Michael A. Amos v. Department of Human Resources 
Benjamin McCormick v. Department of Human Resources 
Gregory N. Winley v. Department of Human Resources 
Ronald Brown v. Department of Human Resources 
James L. Phillips v. Department of Human Resources 
George Aaron Collins v. Department of Human Resources 
Samuel L. Dodd v. Department of Human Resources 
James W. Smith v. Department of Human Resources 
Mlliam A. Selleis v. Department of Human Resources 
Jerry Mclver v. Department of Human Resources 
Johni^ B. Little v. Department of Human Resources 
Kenneth W. Cooper v. Department of Human Resources 
Nathan D. Winston v. Department of Human Resources 
Bobty Charles Coleman v. Department of Human Resources 
Anthony Curry v. Department of Human Resources 
Charles W. Nor\w)od Jr. v. Department of Human Resources 
David L. Terry v. Department of Human Resources 
Audwin Lindsay v. Department of Human Resources 
Steven A. Elmquist v. Department of Human Resources 
Kelvin Dean Jackson v. Department of Human Resources 
Jerry R. Gibson v. Department of Human Resources 
Melvin Lewis Griffin v. Department of Human Resources 
Dennis E. Fountain Jr. v. Department of Human Resources 
Mark E. Rogers v. Department of Human Resources 
Edna VonCaimon v. Department of Human Resources 
Darron J. Roberts v. Department of Human Resources 
Ephrom Sparkman Jr. v. Department of Human Resources 
Thomas A. Ayere v. Department of Human Resources 
Daniel Thomas Hefele v. Department of Human Resources 
Gilbert J. Gutierrez v. Department of Human Resources 
Alton D. Johnson v. Department of Human Resources 
Darryl C. Thompson v. Department of Human Resources 
JefFery E. Holley v. Department of Human Resources 
Chester Sandeis v. Department of Human Resources 
Rodney Guyton v. Department of Human Resources 
Nelson Bennett v. Department of Human Resources 
Donald W. Clark v. Department of Human Resources 



CASE 




DATE OF PUBLISHED DECISION 


NUMBER 


MJ 


DECISION REGISTER CITATION 


93CSE 1188 


West 


07/11/94 


93CSE 1191 


Bee ton 


05/09/94 


93CSE 1197 


Nesnow 


06/28/94 


93 CSE 1198 


Morgan 


08/02/94 


93 CSE 1199 


Bee ton 


08/22/94 


93 CSE 1202 


Gray 


04/27/94 


93 CSE 1212 


Gray 


08/26/94 


93 CSE 1214 


MomBon 


06/16/94 


93 CSE 1215 


Reilly 


06/17/94 


93 CSE 1219 


Nesnow 


06/16/94 


93 CSE 1221 


Morgan 


08/02/94 


93 CSE 1222 


Morgan 


07/15/94 


93 CSE 1227 


Mann 


07/07/94 


93 CSE 1254 


Morrison 


04/27/94 


93 CSE 1258 


West 


04/19/94 


93 CSE 1259 


West 


04/19/94 


93 CSE 1261 


Nesnow 


08/22/94 


93 CSE 1264 


Morgan 


07/15/94 


93 CSE 1267 


Bee ton 


04/20/94 


93 CSE 1271 


Gray 


08/26/94 


93 CSE 1273 


Morrison 


07/07/94 


93 CSE 1274 


Morrison 


06/30/94 


93 CSE 1275 


Bee ton 


05/18/94 


93 CSE 1283 


Reilly 


06/30/94 


93 CSE 1284 


West 


06/23/94 


93 CSE 1287 


Nesnow 


06/28/94 


93 CSE 1291 


Bee ton 


08/22/94 


93 CSE 1301 


Morrison 


08/23/94 


93 CSE 1302 


Morrison 


06/30/94 


93 CSE 1303 


Reilly 


06/30/94 


93 CSE 1307 


West 


04/25/94 


93 CSE 1308 


West 


07/15/94 


93 CSE 1313 


Morgan 


08/02/94 


93 CSE 1316 


Becton 


06/14/94 


93 CSE 1318 


Bee Ion 


06/29/94 


93 CSE 1326 


Reilly 


06/17/94 


93 CSE 1331 


West 


04/25/94 


93 CSE 1357 


Gray 


03/31/94 


93 CSE 1358 


Gray 


08/26/94 


93 CSE 1359 


Morrison 


04/20/94 


93 CSE 1362 


Reilly 


06/30/94 


93 CSE 1363 


West 


06/23/94 


93 CSE 1364 


West 


04/27/94 


93 CSE 1365 


Nesnow 


07/07/94 


93 CSE 1368 


Morgan 


08/02/94 


93 CSE 1371 


Chess 


08/18/94 


93 CSE 1385 


West 


06/13/94 


93 CSE 1386 


Mann 


05/18/94 


93 CSE 1390 


Morrison 


07/15/94 


93 CSE 1392 


Reilly 


04/29/94 


93 CSE 1394 


West 


06/13/94 


93 CSE 1411 


Nesnow 


08/24/94 


93 CSE 1412 


Morgan 


08/02/94 


93 CSE 1414 


Chess 


05/13/94 


93 CSE 1415 


Mann 


05/03/94 


93 CSE 1417 


Morrison 


06/14/94 


93 CSE 1419 


West 


08/23/94 


93 CSE 1422 


Morgan 


08/04/94 


93 CSE 1431 


Morrison 


06/30/94 


93 CSE 1432 


Morrison 


04/28/94 


93 CSE 1433 


Morrison 


05/13/94 


93 CSE 1434 


Reilly 


04/29/94 


93 CSE 1435 


Reilly 


06/30/94 


93 CSE 1436 


Reilly 


08/23/94 


93 CSE 1437 


West 


04/19/94 


93 CSE 1439 


West 


04/21/94 


93 CSE 1440 


Nesnow 


08/31/94 


93 CSE 1441 


Nesnow 


05/13/94 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



935 



CONTESTED CASE DECISIONS 



AGENCY 



William E. David Jr. v. Department of Human Resources 
Arthur Lee Carter v. Department of Human Resources 
Frank Reiff v. Department of Human Resources 
John J. Gabriel v. Department of Human Resources 
Robert Hayes v. Department of Human Resources 
Clark Anthor^ Bryant v. Department of Human Resources 
Timothy D. Evans v. Department of Human Resources 
Billy Edward Smith v. Department of Human Resources 
Allen D. Terrell v. Department of Human Resources 
Ray C. Moses v. Department of Human Resources 
Mickey Bridgett v. Department of Human Resources 
David Beduhn v. Department of Human Resources 
Bart Ransom v. Department of Human Resources 
William H. Simpson Sr. v. Department of Human Resources 
Clarcince J. Catling Jr. v. Department of Human Resources 
James D McClure Jr. v. Department of Human Resources 
Christopher Ivan Smith v. Department of Human Resources 
Douglas L. Cherrix v. Department of Human Resources 
Dwayne Lamont Thompson v. Department of Human Resources 
Michael Edwin Smith v. Department of Human Resources 
Horace Lee Bass v. Department of Human Resources 
Michael Wilder v. Department of Human Resources 
William Howaid Wright v. Department of Human Resources 
James A. Cephas v. Department of Human Resources 
EdwQid E. Furr v. Department of Human Resources 
Mark E. Campbell v. Department of Human Resources 
William Ellis v. Department of Human Resources 
Henry A. Harriel Jr. v. Department of Human Resources 
John H. Fortner Jr. v. Department of Human Resources 
Mike Johnson v. Department of Human Resources 
Harriet Easterling v. Department of Human Resources 
Wade A. Burgess v. Department of Human Resources 
Billy Dale Bcaney v. Department of Human Resources 
Gregory Harrell v. Department of Human Resources 
James E. Wiggins Sr. v. Department of Human Resources 
Tony A. Draughon v. Department of Human Resources 
Ruben Jonathan Bostillo v. Department of Human Resources 
Timothy J. Jones v. Department of Human Resources 
Randall E. Hunter v. Department of Human Resources 
Cyrtis R. Luallen v. Department of Human Resources 
Willie Hawkins v. Department of Human Resources 
B.A. Sellen v. Department of Human Resources 
Alton E. Simpson Jr. v. Department of Human Resources 
Johnry T Usher v. Department of Human Resources 
Tim H. Maxwell v. Department of Human Resources 
Charles Darrcll Matthews v. Department of Human Resources 
John William Vance Jr. v. Department of Human Resources 
Bobty R. Sanders v. Department of Human Resources 
Michael S. Rhynes v. Department of Human Resources 
Denise L. Smith v. Department of Human Resources 
Brian Gilmort v. Department of Human Resources 
Jesse Jeremy Bullock v. Department of Human Resources 
Ronald E. Loweke v. Department of Human Resources 
Robert D. Parker v. Department of Human Resources 
Charles F. McKirahan Jr. v. Department of Human Resources 
Bennie E. Hicks v. Department of Human Resources 
Herbert Council v. Department of Human Resources 
Richard Rachel v. Department of Human Resources 
Alan V. Teubert v. Department of Human Resources 
Henry L. Ward Jr. v. Department of Human Resources 
Benjamin J. Stroud v. Department of Human Resources 
Charles Leonard Fletcher v. Department of Human Resources 
Tony A. Miles v. Department of Human Resources 
Dwayne L. Allen v. Department of Human Resources 
Earl Newkirk Jr. v. Department of Human Resources 
Joe C. Dean v. Department of Human Resources 
Vernon Bullock v. Department of Human Resources 
Jessie Liies v. Department of Human Resources 



CASE 




DATE OF PUBLISHED DECISION 


NUMBER 


MJ 


DECISION REGISTER CITATION 


93 CSE 1442 


Nesnow 


05/02/94 


93 CSE 1445 


Morgan 


08/10/94 


93 CSE 1448 


Becton 


08/22/94 


93 CSE 1452 


Chess 


05/16/94 


93 CSE 1453 


Mann 


07/07/94 


93 CSE 1455 


Gray 


06/30/94 


93 CSE 1460 


Reilly 


04/28/94 


93 CSE 1461 


West 


04/19/94 


93 CSE 1463 


NesnCTV 


05/02/94 


93 CSE 1464 


Neanaw 


04/28/94 


93 CSE 1468 


Becton 


05/24/94 


93 CSE 1494 


Gray 


08/30/94 


93 CSE 1495 


Morrison 


04/29/94 


93 CSE 1497 


West 


04/19/94 


93 CSE 1499 


Morgan 


08/02/94 


93 CSE 1500 


Bee too 


05/13/94 


93 CSE 1510 


Gray 


07/07/94 


93 CSE 1512 


Gray 


05/13/94 


93 CSE 1515 


Morrison 


04/21/94 


93 CSE 1517 


Morrison 


08/26/94 


93 CSE 1520 


Morrison 


05/13/94 


93 CSE 1521 


Reilly 


04/28/94 


93 CSE 1522 


Reilly 


08/26/94 


93 CSE 1523 


Reilly 


05/13/94 


93 CSE 1524 


Reilly 


06/17/94 


93 CSE 1537 


Nesncw 


05/19/94 


93 CSE 1540 


Moigan 


08/02/94 


93 CSE 1541 


Morgan 


08/04/94 


93 CSE 1542 


Morgan 


08/02/94 


93 CSE 1544 


Morgan 


08/04/94 


93 CSE 1560 


Mann 


05/18/94 


93 CSE 1568 


Morrison 


04/28/94 


93 CSE 1569 


Morrison 


05/13/94 


93 CSE 1570 


Morrison 


08/26/94 


93 CSE 1571 


Morrison 


05/13/94 


93 CSE 1572 


Reilly 


07/07/94 


93 CSE 1574 


Reilly 


09/01/94 


93 CSE 1576 


West 


04/19/94 


93 CSE 1579 


West 


04/19/94 


93 CSE 1583 


Nesnow 


06/16/94 


93 CSE 1585 


Morgan 


08/02/94 


93 CSE 1586 


Morgan 


08/02/94 


93 CSE 1591 


Bee ton 


04/20/94 


93 CSE 1592 


Chess 


05/19/94 


93 CSE 1594 


Chess 


06/30/94 


93 CSE 1596 


West 


06/13/94 


93 CSE 1597 


Becton 


05/13/94 


93 CSE 1598 


Nesnow 


07/25/94 


93 CSE 1599 


Nesnow 


06/30/94 


93 CSE 1603 


Chess 


08/18/94 


93 CSE 1615 


Chess 


05/13/94 


93 CSE 1632 


Morrison 


06/14/94 


93 CSE 1635 


Reilly 


06/17/94 


93 CSE 1637 


Reilly 


06/29/94 


93 CSE 1640 


West 


06/14/94 


93 CSE 1641 


Nesnow 


07/25/94 


93 CSE 1643 


Nesnow 


07/25/94 


93 CSE 1644 


Morgan 


08/02/94 


93 CSE 1645 


Morgan 


08/10/94 


93 CSE 1646 


Morgan 


08/02/94 


93 CSE 1648 


Becton 


05/19/94 


93 CSE 1649 


Becton 


07/20/94 


93 CSE 1654 


Mann 


05/24/94 


93 CSE 1655 


Mann 


05/17/94 


93 CSE 1680 


Morrison 


08/26/94 


93 CSE 1715 


Gray 


05/23/94 


93 CSE 1743 


Nesnow 


07/07/94 


93 CSE 1757 


Morgan 


08/02/94 



936 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



CONTESTED CASE DECISIONS 



AGENCY 



Raymood Scott Eaton v. Department of Human Resources 
RqystOD D. Blandfoid ID v. Department of Human Resources 
Michael L. Franks v. Department of Human Resources 
Ronald Garrett v. Department of Human Resources 
Ervin C. Harvey v. Department of Human Resources 
Wanda Jean Lee Daniels v. Department of Human Resources 
Charles E. Colston v. Department of Human Resources 
Daron Wiyne Smith v. Department of Human Resources 
John D. Melton v. Department of Human Resources 
Michael Lynn Jones v. Department of Human Resources 
Larry Hayes v. Department of Human Resources 
Richaid Eugene Dunn v. Department of Human Resources 
Fred Thompson Jr. v. Department of Human Resources 

JUSTICE 

Alarm Systems Licensing Board 

Alarm Systems Licensing Boaid v. George P. Baker 
Private Protective Services Board 



CASE 




DATE OF PUBLISHED DECISION 


NUMBER 


AU 


DECISION REGISTER CITATION 


93 CSE 1761 


Bee ton 


06/29/94 


94 CSE 0095 


West 


04/19/94 


94 CSE 0142 


Chess 


08/16/94 


94 CSE 0227 


Reilly 


08/22/94 


94 CSE 0247 


Beclon 


08/22/94 


94 CSE 0266 


Morgan 


08/02/94 


94 CSE 0280 


Reilly 


08/30/94 


94 CSE 0300 


Gray 


06/27/94 


94 CSE 0324 


Nesnow 


07/25/94 


94 CSE 0402 


Moi^an 


08/02/94 


94 CSE 0456 


Nesnow 


08/22/94 


94 CSE 0494 


West 


07/29/94 


94 CSE 0639 


Morrison 


08/31/94 



93 DOJ 0457 



Nesnow 



03/10/94 



Rex Allen Jefferies v. I'rivQle Protective Services Boaid 
Larry C. Hopkins v. Private Protective Services Boaid 
Gregory K. Brooks v. Private Protective Services Boaid 
Stq>hen M. Rose v. Private Protective Services Boaid 
Lemuel Lee Clark Jr. v. Private Protective Services Board 
Dexter R. Usher v. Private Protective Services Boaid 
Johni^ R. Dollar v. Private Protective Services Boaid 

Training and Standards Division 

Curtiss Lance Bateat v. Criminal Justice Ed. &, Training Stds. Comm. 
Willie David Moore v. Criminal Justice Ed. & Training Skis. Comm. 
Glenn Travis Stout v. Criminal Justice Ed. & Training Sids. Comm. 
Steven W, Wray v. Sheriffs* Education & Training Standaids Comm. 
J. Stevan North v. Sheriffs' Education & Training Standaids Comm. 
Gregory Blake Manning v. Criminal Justice Ed. & Training Stds. Comm. 
Russell Pinkelton Jr. v. Sheriffs' Education & Training Slds. Comm. 
William Franklin Shcetz V. Sheriffs' Education & Training Stds. Comm. 
James M. Buie v. Criminal Justice Ed. &. Training Stds. Comm. 
Nelson Falcon v. Sheriff^ Education & Trainii^ Stds. Comm. 

MORTUARY SCIENCE 



93 DOJ 0647 


Reilly 


08/01/94 


93 DOJ 1618 


Morrison 


03/07/94 


94 DOJ 0008 


Nesnow 


06/28/94 


94 DOJ 0359 


Nesnow 


05/19/94 


94 DOJ 0360 


Nesncw 


05/19/94 


94 DOJ 0648 


Reilly 


08/15/94 


94 DOJ 0796 


Morrison 


08/24/94 



93 DOJ 0231 


Chess 


03/28/94 


93 DOJ 1071 


Nesnow 


04/11/94 


93 DOJ 1409 


Gray 


03/03/94 


93 DOJ 1803 


Chess 


06/29/94 


94 DOJ 0040 


Chess 


06/16/94 


94 DOJ 0048 


Gray 


03/29/94 


94 DOJ 0118 


Gray 


08/10/94 


94 DOJ 0196 


Chess 


06/16/94 


94 DOJ 0401 


Nesnow 


08/26/94 


94 DOJ 0611 


Mann 


08/12/94 



9:3 NCR 218 



Mortuary Science v. Perry J. Brown, & Brown's Funeral DiicctoiB 
PUBLIC EDUCATION 



93 BMS 0532 



Che 



03/28/94 



Nancy Watson v. Boaid of Education 93 EDC 0234 

Janet L. Wilcox v. Carteret County Boaid of Education 93 EDC 0451 

Annice Granville, Phillip J. Granville v. Onslow County Bd. of Education 93 EDC 0742 

Mary Ann Sciullo & Frank Sciullo on behalf of their minor child, 94 EDC 0044 
Samuel W Sciullo v. State Boaid of Education 



Chess 


02/28/94 


9:2 NCR 108 


Mann 


02/21/94 




Mann 


08/01/94 


9:11 NCR 863 


Gray 


07/22/94 





STATE HEALTH BE3MEFITS OFFICE 



Linda C. Campbell v. Teacheis & St Emp Major Medical Plan 
Timothy L. Coggins v. Teacheis' & St Emp Comp Major Med Plan 
P.H.B. V. Teacheis & Slate Employees Comp Major Medical Plan 



93 INS 0410 


Bee ton 


04/22/94 




93 INS 0929 


Morrison 


03/04/94 




94 INS 0345 


Gray 


08/23/94 


9:12 NCR 945 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



937 



CONTESTED CASE DECISIONS 



AGENCY 



CASE DATE OF PUBLISHED DECISION 

NUMBER ALJ DECISION REGISTER CITATION 



STATE PERSONNEL 

Michael L. K. Benson v. Office of State IfeiBonnel 

AgricuUuml and Technical State University 

Linda D. Williams v. Agricultuial and Technical State University 
Juanita D. Murphy v. Agricultuial and Technical State Univereity 
Thomas M. Simpson v. Agricultural and Technical State Univereity 
Pricella M. Curtis v. A&T Slate Univereity Curriculum & Instruction 

Department of Agricuiture 

Donald H. Crawford v. Department of AgricultUK 

Catawba County 

Sandra J. Cunningham v. Catawba County 

North Carolina Central University 

Ha-Yilyah Ha-She'B v. NCCU 

Cherry Hospital 

Charles F. Fields v. Cherry Hospital 

Department of Commerce 

Ruth Daniel-fcrry v. Department of Commerce 

Department of Correction 

Lcland K. Williams v. Department of Correction 

EIroy Lewis v. North Central Area - Dept of Correction, Robert Lewis 

Steven R. Kellison v. Department of Correclion 

Bert Esworthy v. Department of Correclion 

James J. Lewis v. Department of Correction 

Merron Burrus v. Department of Correction 

Lewis Alsbrook v. Department of Correction, Morrison Youth Institution 

Junius C. F^e v. Depl. of Correction, Secy. Franklin Freeman 

Richaid Hopkins v. Department of Correction 

Alfred B. Hunt v. Department of Correclion 

Charles Home v. Equal Emp. Opportunity Officer & Dept. of Correction 

Adrian E. Graham v. Intensive Probation/I^role 

Eastern Correctional Institution 

Roy A. Keel & Zcbedee Taylor v. Eastern Correctional Institution 
Roy A. Keel & Zebedee Taylor v. Eastern Correctional Institution 

Guilford Correctional Center 
Ann R. Williams v. Guilford Correctional Center #4440 

McDowell Correctional Center 

Michael Junior Logan v. Kenneth L. Setzer, McDowell Corr. Ctr. 

Cosmetic Art Examiners 

Mary Quaintancc v. N.C. State Board of Cosmetic Art Examinees 

Department of Crime Control and PuhUc S<^ety 

Don R. Massenbuig v. Department of Crime Control & I*ublic Safety 
Fred L. Kearney v. Department of Crime Control & Public Safety 
Sylvia Nance v. Department of Crime Control & Public Safety 



93 OSP 1690 



Neanow 



08/23/94 



93 OSP 0089 


Chess 


03/23/94 


93 OSP 0708 


Morrison 


03/16/94 


93 OSP 1393 


Gray 


03/24/94 


94 OSP 0748 


Gray 


08/17/94 



94 OSP 0108 



93 OSP 1097 



93 OSP 0875 



94 OSP 0498 



93 OSP 0725 



Reilly 



ReiUy 



Bee ton 



05/23/94 



04/29/94 



04/13/94 



Morrison 06/15/94 



Chess 



03/04/94 



94 OSP 0160** 
94 OSP 0256** 



94 OSP 0428 



94 OSP 0546 



94 OSP 0372 



Nesnow 
Nesnow 



West 



Gray 



Chess 



07/20/94 
07/20/94 



06/22/94 



09/01/94 



06/14/94 



9:4 NCR 292 



9;3 NCR 211 



9:1 NCR 63 



91 OSP 1287 


Chess 


02/22/94 




92 OSP 1770 


Bee ton 


05/24/94 


9:6 NCR 395 


93 OSP 0283 


Chess 


06/15/94 




93 OSP 0711 


Chess 


04/21/94 




93 OSP 1121 


West 


08/31/94 




93 OSP 1145 


West 


06/01/94 




93 OSP 1739 


West 


07/20/94 




93 OSP 1794 


Mann 


07/08/94 




94 OSP 0041 


Chess 


06/16/94 




94 OSP 0243 


Reilly 


04/20/94 




94 OSP 0244 


Nesnow 


06/16/94 




94 OSP 0261 


Morrison 


04/26/94 





90 OSP 0239 


Chess 


04/28/94 


91 OSP 0401 


West 


03/18/94 


92 OSP 1463 


Reilly 


03/21/94 



938 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



CONTESTED CASE DECISIONS 



AGENCY 



CASE 
NUMBER 



ALJ 



DATE OF 
DECISION 



PUBLISHED DECISION 
REGISTER CITATION 



93 DSP 1079 

94 DSP 0572 



93 OSP 1780 



94 OSP 0207 



93 OSP 1069 



Anthony R. Butler v. Highway fttrol 

Lewis G. Baker v. Crime Control & Public Safety, Office Adj. General 

Durham County Health Department 

Lyila Denell Stockton v. Durham County Health Department 

EBzabeth Oty State University 

James Charles Knox v. Elizabeth City State University 

Employment Security Commission of North CaroHna 

Rejeanne B. LeFrancois v. Emplcyment Security Commission of N.C. 

Department of Environment, Health, and Natural Resources 

Division of Marine Fisheries 

William D. Nicely v. Environment, Health, & Natural Resouices 

Fayetteville State University 

Roscoe L. Williams v. Fayetteville State Univeraity 

Department of Human Resources 



Inez. Latta v. Department of Human Resources 93 OSP 0830 

Charla S. Davis v. Department of Human Resources 93 OSP 1762 

Rose Maty Taylor v. Department of Human Resources, Murdoch Center 93 OSP 0047 

David R. Rodgere v. Jimmy Summerville, Stonewall Jackson School 94 OSP 0087 

Dr fttricia Sokol v. James B. Hunt, Governor and Human Resources 94 OSP 0357 



West 
Mann 



Gray 



Gray 



West 



92 OSP 1454 



93 OSP 0487 



Bectoa 



West 



Bee ton 

Gr^ 

Gray 

Chess 

Chess 



08/30/94 
07/12/94 



05/25/94 



06/17/94 



04/08/94 



05/04/94 



06/22/94 



03/28/94 
03/03/94 
05/06/94 
03/16/94 
08/22/94 



93 OSP 1606 


Gray 


07/01/94 


93 OSP 1607 


Gray 


07/18/94 


93 OSP 1805 


Reilly 


07/05/94 



Craven County Department of Social Senices 

Shirl^ A. Holland v. Craven Cty. Dept. /Social Services & Craven Cty. 
Nettie Jane Godwin (Lawhom) v. Craven Cty. DSS & Craven Cty. 
Violet P Kelly v. Craven Cty. Dept. of Social Services & Craven Cty. 

Durham County Department of Social Services 
Belinda F. Jones v. Daniel Hudgins, Durham Cty Dept of Social Svcs 93 OSP 0728 Chess 04/1 1/94 

Haywood County Department of Social Services 
Dorothy Morrow v. Haywood County Department of Social Services 94 OSP 0186 West 06/17/94 

Pamlico County Department of Social Services 
Mre. Dietra C. Jones V. Pamlico Department of Social Services 94 OSP 0251 Chess 08/09/94 

Lee County Health Department 
James Shacklelon v. Lee County Health Department 94 OSP 0344 Gray 08/17/94 

Mental Health/Mental Retardation 
Yvonne G. Johnson V. Blue Ridge Mental Health 93 OSP 1604 Becton 03/18/94 

Wike County Menial Health, Developmental Disabilities, and Substance Abuse Senices 
Julia Morgan Brannon V. Wake County MH/DD/SAS 94 OSP 0214 Reilly 04/14/94 

Real Estate Appraisal Board 
Earl Hansfoid Grubbs v. Appraisal Board 94 OSP 0753 Nesnow 08/24/94 



9:5 NCR 333 



9:9 NCR 655 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



939 



CONTESTED CASE DECISIONS 



AGENCY 



CASE 
NUMBER 



ALJ 



DATE OF 
DECISION 



PUBLISHED DECISION 
REGISTER CITATION 



N.C. Staie University 

Laura K- Reynolds v. N.C. Slate University - Dept. of Public Safety 

Department of Transportation 

Phyllis W. Newnam v. Department of Transporbtion 

Glenn I. Hodge Jr. v. Samuel Hunt, Sec'y. Dept. of Transportetion 

Glenn I. Hodge Jr. v. Samuel Hunt, Sec'y. Dept. of Transporfation 

Betsy Johnston Powell v. Department of TransporBtion 

Arnold Craig v. Samuel Hunt, Secretary Department of TransporBtion 

Susan H. Cole v. Department oi Transportellon, Div. of Motor Vehicles 

Cl)de Lem Hairslon v. Department of TransporBtion 

BobK R. Mayo v. Department of TransporBtion 

Tony Lee Curtis v. Department of Transpo ration 

Darrell H. 'V^'ise v. Department of Transportetion 

Henry C. Puegh v. Department of Transportetion 

Kcrmeth Ray Harvey v. Department of Transportation 

Bobt^' R. Mayo v. Department of Transporstion 

Michael Br>'ant v. Department of TransporBtion 

University of North Carolina at Chapel Hill 

Eric W. Browning v. UNC-Chapel Hill 

University of S'orth CaroHna at Greensboro 

James S. Wilkinson v. UNCG Police Agency 

LWC Hospitals 

Barry Alonzo Nichols v. UNC Hospitals Central Dist. Sect. 

Wake County School System 

Lula Mae Fn^eman v. Wake County School System 

The Whitaker School 



92 OSP 0828 Morgan 05/26/94 



92 OSP 1799 


Morgan 


08/11/94 






93 OSP 0297*' 


Morrison 


03/10/94 


9:1 NCR 


60 


93 OSP 0500** 


Morrison 


03/10/94 


9:1 NCR 


60 


93 OSP 0550 


Morrison 


03/28/94 






93 OSP 0586 


Nesnow 


07/11/94 






93 OSP 0908 


Morrison 


07/15/94 






93 OSP 0944 


Chess 


02/28/94 






93 OSP 1004 


Nesnoft' 


09/01/94 






93 OSP 1037 


Reilly 


08/26/94 






93 OSP 1353 


Gray 


07/26/94 






93 OSP 1710 


Nesnow 


05/24/94 






94 OSP 0423 


Morrison 


08/17/94 






94 OSP 0632 


Gray 


08/23/94 






94 OSP 0728 


Chess 


08/15/94 







93 OSP 0925 



93 OSP 0850 



94 OSP 0509 



94 OSP 0576 



Morrison 05/03/94 



Che 



08/22/94 



Morrison 06/15/94 



Morrison 06/28/94 



9:5 NCR 342 



Dwayne R. Cooke v. The Whitaker School 

STATE TREASURER 

Redrvmenl Systems Division 

Molly Wiebenson v. Bd./TrusTees/Teacheis' & Slate Emplcyees' Ret. Sy^. 
Judith A. Dorman V. Bd.rrrustecs/Teacheis' & State Emplcyees' Ret. Sy3. 
Nathan Relds v. Bd.rTrustees/Teacheis' & State Employees' Ret. Sys. 
John C. Russell v. Bd . n"rusteesn"eacheiB* & Stale Emplcyees' Ret. Sys. 
Marion Franklin Howell v. Teacheis' &. Stale Emplcyees' Retirement Sys. 
Robert A. Slade v. Bd.rirustees/N.C. Local Govtl. Emp. Ret. System 
Connie B. Grant v. Bd . /Trusleesrreachers' & State Emplcyees' Ret. Sy^. 
James E. Walker. Ind. & Admin for the Estate of Sarah S. Walker v. Bd./ 

Truslees/N.C. Local Govt. Emp. Ret. System 
Elizabeth M. Dudley v. Bd.'TrusleesATeacheis' &. Slate Emps' Ret. Sys. 
Kenneth A. Glenn v. Bd./Trustees/Teachets' &. St Employees' Ret. Sys. 
Joseph Fulton v. Bd.rTrusteesATeacheis' & Slate Employees' Ret. Sys. 
Deborah W. Steuart v. Bd.rTrusieesn'eacherB' & State Employees' 

Rel. Sys. and Anthony L. Hope Si. Derrick L. Hope 

TRANSPORTATION 



94 OSP 0328 



Chess 



06/02/94 



92 DST 0015 


Morgan 


05/26/94 


9:6 NCR 


403 


92 DST 0223 


Morgan 


08/11/94 






93 DST 0161 


Morrison 


05/18/94 






93 DST 0164 


West 


03/07/94 






93 DST 0475 


Nesnoft' 


08/04/94 


9:12 NCR 


941 


93 DST 0785 


Bee ton 


03/18/94 


9:1 NCR 


68 


93 DST 0883 


Chess 


06/15/94 






93 DST 1054 


Becton 


05/31/94 


9:7 NCR 


490 


93 DST 1474 


Nesnow 


03/28/94 






93 DST 1612 


Morrison 


05/18/94 






93 DST 1731 


Bee ton 


05/25/94 






94 DST 0045 


Nesnow 


07/25/94 


9:10 NCR 


768 



Taylor & Murphy Construction Co., Inc. v. Department of Transporbtion 93 DOT 1404 

u>frvERsrrY of north Carolina 



Heather Anne fbrter v. State Residence Committee 
Nixon Omolodun v. UNC Physicians and Associates 



92 UNC 0799 
94 UNC 0295 



Che 



Neancwv 
Chess 



08/24/94 



08/23/94 
06/27/94 



940 



9:12 



NORTH CAROUNA REGISTER 



September 15, 1994 



CONTESTED CASE DECISIONS 



STATE OF NORTH CAROLINA 
COUNTY OF NASH 



EN THE OFFICE OF 

ADMINISTRATIVE HEARINGS 

93 DST 0475 



MARION FRANKLIN HOWELL 

Petitioner, 



V. 



N.C TEACHERS' AND STATE EMPLOYEES' 
RETIREMENT SYSTEM 
Respondent. 



RECOMMENDED DECISION 



This matter came on for arguments on stipulated facts on June 17, 1994 before Administrative Law 
Judge Dolores O. Nesnow, in Raleigh, North Carolina. 



APPEARANCES 



Petitioner: 



Respondent: 



Marvin Schiller 
Attorney at Law 
UCB Plaza Suite 220 
3605 Glenwood Avenue 
Raleigh, North Carolina 27612 
Attorney for Petitioner 

Alexander McC. Peters 

Associate Attorney General 

NC Department of Justice 

PC Box 629 

Raleigh, North Carolina 27602-0629 

Attorney for Respondent 

ISSUE 



Did the Respondent err in determining that the Petitioner's disability benefits should be reduced by 
social security benefits where the Petitioner had never been eligible for social security. 

STATUTES AND RULES IN ISSUE 

N.C. Gen. Stat. 135-106(b) 
N.C. Gen. Stat. 135-108 

STIPULATED FACTS 

1 . Petitioner was originally employed as an Agricultural Extension Agent (hereinafter Agent) by North 
Carolina Agricultural Extension Service of North Carolina State University. 

2. Petitioner's salary was funded by both State and local sources, but was not funded by a federal 
source. 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



941 



CONTESTED CASE DECISIONS 



3. Prior to January 1, 1986, Agents were covered by the Federal Civil Service Retirement System 
(hereinafter CSRS). Employees covered by the CSRS, including Petitioner, were not eligible to 
contribute to Federal Social Security System, or to receive Federal Social Security benefits. 

4. Because Agents covered by the CSRS were not permitted to participate in Social Security and because 
the salaries of the Agents were derived from State and local sources. Agents were permitted to 
participate in the Teachers' and State Employees' Retirement System of North Carolina (hereinafter 
TSERS) and North Carolina Local Governmental Employees' Retirement System (hereinafter 
LGERS). 

5. After January 1, 1986, Agents became eligible to transfer from CSRS to the newly created Federal 
Employees' Retirement System (hereinafter FERS) and became eligible to contribute to Social 
Security. Agents covered by the new FERS are not permitted to participate in TSERS or LGERS. 
Petitioner did not transfer from CSRS to FERS. 

6. In September, 1988, Petitioner became disabled; and, as a result of this disability. Petitioner was 
unable to continue to perform the duties of his usual employment. 

7. Efi^ective December 1, 1988, Petitioner was approved for disability retirement from LGERS. 

8. Effective November 22, 1989, Petitioner was approved for the receipt of long-term disability benefits 
from Disability Income Plan of North Carolina (hereinafter DIPNC), a disability plan for members 
of TSERS. 

9. During this same period. Petitioner was also approved for disability retirement from CSRS. 

10. At the time that he became disabled. Petitioner's annual salary was $30,474. Of this amount, $20,712 
came from the State sources and $9,762 came from local sources. 

11. Petitioner applied for/inquired about disability benefits from the Social Security Administration 
(hereinafter SSA). He was informed by the SSA that he was not eligible to receive Social Security 
benefits because he had not contributed to Social Security. The parties specifically stipulate that the 
Petitioner is not eligible to receive Social Security benefits because he was not permitted by law 
during his employment to contribute to the Social Security System. 

12. In 1992, Petitioner received $13,733.74 in benefits from DIPNC and $16,220 in benefits from 
LGERS and CSRS combined. 

13. In 1993, Petitioner received $13,911.08 in benefits from DIPNC (after the Social Security off"set), 
$4,140.00 in benefits from LGERS. and $12,600.00 in benefits from CSRS. 

14. By letter dated December 11, 1992, and December 28, 1992, Petitioner was notified by Respondent 
that his monthly benefits from DIPNC were being reduced $941. (X) effective December 1, 1992. 
Respondent arrived at this amount based on calculations made by its consulting actuary. Petitioner 
was further informed by Respondent that this reduction was being made pursuant to G.S. 135-106(b), 
which states in part that: 

"Upon the completion of four years from the conclusion of (60 days from the last actual day 
of service), the beneficiary's benefit shall be reduced by an amount, as determined by the 
Board of Trustees, equal to a primaiy Social Security disability benefit to which the 
beneficiary might be entitled had the beneficiary been awarded Social Security disability 
benefits. " 

15. Pursuant to G.S. 135-108, the current amount of the reduction is $965.00 per month. The amounts 
of the reductions will vary from time to time due to adjustments in Social Security benefits. 



942 9:12 NORTH CAROLINA REGISTER September 15, 1994 



CONTESTED CASE DECISIONS 



16. Respondent has taken the position that this statute must be applied to Petitioner regardless of the fact 
that Petitioner was not eligible for Social Security disability benefits. 

Petitioner has taken the position that this statute should not be applied to him because he never could 
have been eligible for Social Security disability benefits. 

17. The parties further stipulate and agree that: 

a. we believe that this contested case does not involve any issues or dispute of material feet; 

b. we believe that this contested case presents only questions of law of statutory construction, 
and should be decided upon these stipulated fects; and 

c. we believe that this contested case does not raise any issues raised in Faulkenburv v. TSERS. 
et. al. . Wake County, 90 CVS 12090; Woodard v. LGERS, et. al. . Wake County 91 CVS 
368; or Peele v. TSERS. et al. . Wake County 92 CVS 11978; or other cases raising issues 
that are contained in these cases, and should not be construed to affect Petitioner's status as 
a possible member in any of those class actions. 

18. The Petition for a contested case filed by Petitioner in the Office of Administrative Hearings was 
timely filed after the agency action giving rise to this contested case. 

19. The parties agree that the amounts of any alleged underpayments to Petitioner cannot be presently 
ascertained because they will be continuous until the conclusion of this contested case, and the parties 
therefore stipulate that, should Petitioner ultimately prevail on the merits of this contested case, the 
amounts of any underpayments due him will be calculated at that time. 

20. The parties agree that these stipulated fects may be amended or supplemented and that additional 
relevant exhibits may be introduced as appropriate in the interests of justice. 

21. Petitioner is seeking the following relief: 

a. payment of all disability benefits due him from DIPNC without any ofi'set or reduction for 
Social Security disability benefits, past or future; and 

b. attorney fees. 

Upon consideration of the above Stipulated Facts, the undersigned makes the following: 

CONCLUSIONS OF LAW 

1. N.C. Gen. Stat. 135-106(b) states in pertinent part, that after four years of State disability benefits 

those benefits "shall" be reduced by an amount equal to social security disability benefits "... to which 
the beneficiary might be entitled had the beneficiary been awarded social security disability benefits ." 

This statute, it appears, would encourage State employees who are on State disability to pursue their 
social security benefits. 

Interestingly, N.C. Gen. Stat. 135-106(b) also provides that if social security benefits are denied , the 
State employee's disability benefits will be reduced nonetheless by the amount social security might 
have paid. This statute does not address the threshold disability test for State employees to receive 
disability benefits as compared to the threshold disability test for federal social security disability 
benefits. 



9:12 NORTH CAROLINA REGISTER September 15, 1994 943 



CONTESTED CASE DECISIONS 



The case at hand however does not involve an employee who has been rejected for social security 
disability benefits. It rather involves an employee who under no circumstances or conditions would 
ever be eligible to receive social security benefits. 

The instant case involves a State employee who, because of his eligibility in SCRS, was not permitted 
to contribute to social security during the time of his employment and who was therefore not eligible 
to receive social security benefits under any circumstances. 

2. It is the opinion of the undersigned that the statute cannot reasonably be construed to provide that an 
employee who, under no circumstances, could receive social security benefits, would nonetheless have 
his State benefits reduced by the amount social security would have paid had he or she been eligible 
for those benefits. 

3. It is therefore concluded that the Petitioner's State disability benefits should not have been reduced 
and that the Respondent erred when it so reduced Petitioner's benefits. 

Based upon the above Conclusions of Law, the undersigned makes the following: 

RECOMMENDATION 

1 . That the Petitioner receive payment of all disability benefits due him from DIPNC without any oflFset 
or reduction for social security disability benefits past or future, and 

2. That reasonable attorney fees be awarded. 

ORDER 

It is hereby ordered that the agency serve a copy of the final decision on the Office of Administrative 
Hearings, P.O. Drawer 27447, Raleigh, N.C. 27611-7447, in accordance with North Carolina General Statute 
150B-36(b). 

NOTICE 

The agency making the final decision in this contested case is required to give each party an 
opportunity to file exceptions to this recommended decision and to present written arguments to those in the 
agency who will make the final decision. G.S. 150B-36(a). 

The agency is required by G.S. 150B-36(b) to serve a copy of the final decision on all parties and to 
furnish a copy to the parties' attorney of record and to the Office of Administrative Hearings . 

The agency that will make the final decision in this contested case is the Board of Trustees of the 
Teachers' and State Employees' Retirement System. 

This the 4th day of August, 1994. 



Dolores O. Nesnow 
Administrative Law Judge 



944 9:12 NORTH CAROLINA REGISTER September 15, 1994 



CONTESTED CASE DECISIONS 



STATE OF NORTH CAROLINA 
COUNTY OF STANLY 



IN THE OFFICE OF 

ADMINISTRATIVE HEARINGS 

94 INS 0345 



P.H.B. 



Petitioner, 



V. 



N.C TEACHERS' AND STATE EMPLOYEES' 
COMPREHENSIVE MAJOR MEDICAL PLAN 
Respondent 



RECOMMENDED DECISION 



The above-captioned hearing was heard before Administrative Law Judge Beecher R. Gray, on July 
1994, in Charlotte, North Carolina. 



For Petitioner: 



For Respondent: 



APPEARANCES 

Thomas E. Cone 

Turner Enochs & Lloyd, P. A. 

RO. Box 160 

Greensboro, NC 27402-0160 

Attorney for Petitioner 

Evelyn B. Terry 

General Counsel 

N.C. Teachers' and State Employees' Comprehensive Major Medical Plan 

4509 Creedmoor Road 

Raleigh, NC 27612 

Attorney for Respondent 

ISSUE 



Did the Respondent err in denying continued certification for admission of patient "R.B. " for her 
continued stay at Carolinas Medical Center - Center for Mental Health from February 28 through her 
discharge on May 20, 1993, for acute psychiatric care? 

STATUTES AND RULES IN ISSUE 

N.C. Gen. Stat. § 135-39.8 

N.C. Gen. Stat. § 135-40(b) 

N.C. Gen. Stat. § 1 35-40. 7B 

N.C. Gen. Stat. § 135-40.7(5) 

N.C. Gen. Stat. § 150B-1 
N.C. Gen. Stat. § 150B-2(8a) 

BURDEN OF PROOF 

Petitioner has the burden of showing by the greater weight of the substantial evidence admitted that 
the Respondent erred as stated in the issue. 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



945 



CONTESTED CASE DECISIONS 



EXfflBITS 

For Petitioner: 

Exhibit A Medical Records from Carolinas Medical Center - Center for Mental Health for R.B., 

Admitted February 19, 1993, Discharged May 10, 1993 



Exhibit B 
Exhibit C 

Exhibit D 

For Respondent: 



Curriculum Vitae for Pleas Rogers Geyer, M.D., Treating Physician for R.B. 

Pages 24 and 25 from the State of North Carolina Teachers' and State Employees' Major 
Medical Plan describing mental health benefits coverage 

North Carolina General Statutes § 1 35-40. 7B Special Provisions for Mental Health Benefits. 
Section of the North Carolina General Statutes describing mental health benefits under the 
Teachers' and State Employees' Comprehensive Medical Plan 



Exhib 
Exhib: 
Exhib 
Exhib 
Exhib 
Exhib 
Exhib: 
Exhib: 

Exhib: 

Exhibi 
Exhib 
Exhib 

Exhib 
Exhib 
Exhib 
Exhib 



t 1 North Carolina General Statutes 135-40. 7B Special Provisions for Mental Health Benefits 

t 2 Medical Policy on Mental Health Case Management ADO430:00 

t 3 Medical Policy on Mental Health Case Management ADO450:00 

t 4 Curriculum Vitae of Mental Health Case Manager Michael S. Lancaster, M.D. 

t 5 Case history screen for Mental Health Case Manager Administrative Documentation 

t 6 Case history screen for Mental Health Case Manager Justification for treatment 

t 7 Blue Cross and Blue Shield Certification Form 

t 8 Letter from Mental Health Case Manager dated February 28, 1993 to Center for Mental 

Health denying certification for continued acute inpatient treatment 

t 9 Reconsideration Review by second psychiatrist at Mental Health Case Manager upholding 

original denial 

t 10 Letter to Center for Mental Health informing provider of reconsideration review 

t 1 1 Letter to Petitioner informing her of reconsideration review 

t 12 Review by independent arbiter from the American College of Medical Quality [Admitted for 

procedural purposes and not for its substantive description of patient's condition] 

t 1 3 Letter to Petitioner informing her of findings of independent arbiter 

t 14 Letter to Center for Mental Health informing provider of findings of independent arbiter 

t 15 Discharge Summary from Center for Mental Health 

t 16 Medical records from Center for Mental Health 



946 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



CONTESTED CASE DECISIONS 



WITNESSES 

For Petitioner: 

P.H.B., Albemarle, North Carolina 

Pleas R. Geyer, M.D. - Charlotte, North Carolina 

For Respondent: 

Harold Wright, Deputy Administrator of the State of North Carolina Teachers' and State Employees' 

Comprehensive Major Medical Plan 
Michael Lancaster, M.D., Raleigh, North Carolina 

FINDINGS OF FACT 

1. P.H.B., Petitioner in this matter, is employed by the State of North Carolina and is a 
participant in the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan 
(hereinafter "the Plan"). Petitioner has a daughter, R.B., who is also a Plan beneficiary as a femily member 
ofRH.B. 

2. R.B. was bom on June 2, 1976 and was 16 years old at the time of her admission to 
Carolinas Medical Center - Center for Mental Health ("CMC"). 

3. She was admitted to CMC from February 19, 1993 through May 10, 1993 with a diagnosis 
of major depression and oppositional defiant disorder with eating disorder. 

4. R.B. maintained a reasonable adjustment to her school and home life until approximately 
January of 1992. As reported by her mother, at this time she began to withdraw from previous acquaintances. 
She began to have explosive tantrums which were accompanied by repeated episodes of property destruction. 
She began to run away repeatedly, remaining away from home for weeks at a time. During these periods, 
she also missed school and other activities. Her grades deteriorated to failing and she had a number of 
disciplinary problems at school. 

5. With the onset of this behavior, her mother found her behavior to be unmanageable and she 
was sent to live with her father and step-mother. Her negative behaviors escalated despite counseling and out- 
of-home placement trials. 

6. During the year prior to her admission she began to eat compulsively and gained over ICX) 
pounds. Sixty pounds of that gain were in the 3 months prior to the admission to CMC, at which time she 
weighed 260 pounds. 

7. This patient has a history of a prior inpatient acute psychiatric care admission to Presbyterian 
Hospital from May 17 through June 29, 1992. Her admitting diagnosis was major depression. She was 
discharged on June 29 in part because of a termination of insurance coverage. Although she was begun on 
a trial of Prozac, she refused to continue to take the Prozac. 

8. The admission to Presbyterian Hospital was precipitated in part by the petitioner's violent 
attack on her mother including the use of a knife. Since January of 1992, she has increasingly demonstrated 
violent and aggressive behavior toward her mother and others. On one occasion in September of 1992 the 
petitioner held a party at her mother's home in her mother's absence. She and her friends vandalized the 
home, causing extensive property damage. 

9. The patient has routinely threatened her mother, and has physically attacked her on at least 
one occasion. 



9:12 NORTH CAROLINA REGISTER September 15, 1994 947 



CONTESTED CASE DECISIONS 



10. On many occasions the petitioner threatened to stab her mother and to kill herself as well. 
On many occasions she inflicted superficial cuts on her wrists. She also stole and hid knives on several 
occasions. 

1 1 . Since her admission at Presbyterian Hospital, her mother and fether attempted to have her 
participate in outpatient therapy through the Stanley County Mental Health Department. However, because 
of her extensive runaway behavior, she did not consistently attend this therapy. 

12. Her mother also made extensive attempts to find a group therapeutic home which could work 
with her daughter. However, after contacting approximately 40 homes, she was unable to find one that would 
take and treat her daughter. 

13. On many of her runs, the patient ended up at The Relatives, a shelter for children. On her 
last run prior to her admission to CMC, the staff" at The Relatives told her mother that they could not continue 
to hold her there because they could not provide appropriate treatment. 

14. Following her departure from The Relatives, the Mills Homes, a children's longterm care 
residential treatment center, agreed to interview the petitioner, but refused to admit her after she became 
violent and threatening during the interview. 

15. The Mills Home did not have the ability to handle her symptoms, particularly including her 
rage, violence, and self-destructive tendencie:;. Upon returning home from the Mills Home, the patient 
became violent, breaking many items in her mother's home and threatening to stab her mother during the 
night. Because of her daughter's past history of violence toward her, including at least one prior attack with 
a knife, the mother took these threats seriously. She contacted the police, but was told that since her daughter 
was over 16 there was nothing they could do. Shortly after this, the patient ran away. Her mother found her 
two weeks later in 20° weather with no place to stay and in bad physical condition. She brought her to the 
CMC emergency room at this time. 

16. Following a 24-hour observation period at CMC she was described as follows: 

Symptoms escalated with self cutting, recurrent runaway, school avoidance, increasingly 
violent tantrums with extensive property damage in the home. Patient in treatment at Stanley 
County Mental Health where mother lives but has continued decline. In past 3 months 40- 
pound weight gain to 260 pounds. Over past 2 months, increasingly persistent and detailed 
suicidal ideation. Superficial self-cutting on wrists. Attempt to stabilize in group home 
failed to halt deterioration. 

Mental status - tearful, disheveled, psychomotor retarded. Twelve years old was last time 
she remembered enjoying herself. Detailed suicidal ideation (cutting wrists, taking pills) . 
. . . Forty-pound weight gain last 3 months. 

Impression: Major depression; eating disorder NOS; morbid obesity. 

17. Dr. Geyer testified that at the time of admission she was psychomotor retarded, meaning that 
she was lethargic most of the time. She was minimally responsive to those around her. Any issues related 
to adult influence led to irritability and explosive behavior. She expressed no concern as to whether she lived 
or died. She interpreted all emotions as hunger and ate compulsively. In Dr. Geyer's opinion, she was 
clearly depressed. 

18. Dr. Geyer further testified that she had never engaged in any observable treatment alliance 
during any of her prior treatments, whether inpatient or outpatient. In general she would take the option of 
running away rather than engaging in therapy. Dr. Geyer testified, and it is found as fact, that any treatment 
facility less restrictive than an acute care facility with a locked ward would not have been adequate to contain 
the petitioner because of her strong tendency to run away. 



948 9:12 NORTH CAROLINA REGISTER September 15, 1994 



CONTESTED CASE DECISIONS 



19. Dr. Geyer testified, and it is so found, that the petitioner met the diagnostic criteria for major 
depression as found in the Diagnostic and Statistical Manual - III-R. 

20. Because of the lack of either length of time or intensity, none of petitioner's prior treatment 
programs had been sufficient to engage her in a treatment alliance. 

21 . Dr. Geyer testified, and it is found as feet, that at the time of her admission on February 19, 
1993, the petitioner required evaluation and hospitalization for intensive, broad-based treatment to determine 
the underlying issues, engage her in therapy, and give her the ability to recognize and deal with the issues 
underlying her psychiatric problems. 

22. Patient also required the intensive level of treatment available only in an acute inpatient 
fecility. This setting allows the treating team to work with the patient within various settings including her 
own peer group, a school setting, femily counseling, individual therapy, and other therapeutic settings. This 
can all be carried out under the direct supervision of a Board-certified child psychiatrist who oversees and 
orchestrates the diagnostic and treatment formulations. 

23. Dr. Geyer testified, and it is found as feet, that it was medically necessary that petitioner 
receive acute psychiatric treatment on a short term, inpatient basis under the care of a physician. 

24. During the course of R.B.'s treatment. Dr. Geyer and the treating team established discharge 
criteria to be used to determine the petitioner's progress and to estoblish an appropriate time for discharge. 
These included the following: 

A. She should be engaged in productive psychotherapy so that she can recognize her 
symptoms (such as diet, violent fentrums, etc.) and begin to learn to deal with them; 

B. The engagement in therapy must be demonstrated by a mitigation of her behavioral 
symptoms, thus indicating that she has begun to develop some internal ability to control her behavior; 

C. She must be able to comply with the routine in the hospital as a marker of her ability 
not to run away once she has been discharged; and 

D. She must demonstrate the ability to modulate her impulse to compulsively eat. 

25. Dr. Geyer testified, and it is found as feet, that these are appropriate discharge criteria for 
the petitioner given her condition and history at that time. 

26. Early in the patient's treatment her ability to comply with a weight loss program was seen 
as an important marker of her ability to recognize and fece her problems. By March 1 1 , it was noted that 
she still showed significant symptoms of sadness, anger and pessimism with any discussion of significant 
issues, such as a relationship with her mother. Her eating was noted to be clearly in reaction to her sadness 
or anger. By March 18, she continued to evade her diet. The treating team recognized that she mislabeled 
her feelings of loneliness, ugliness and so on as hunger. This was seen as a clear marker that she had not 
been able to address any of her primary symptoms by March 18. On March 25 it was noted that her behavior 
continued to be consistently oppositional but that she was unable to relate this behavior to any issues related 
to her relationship with her femily or behavioral problems. By April 1 , she was beginning to admit to feelings 
of loneliness and self-disgust, but had not made progress on relating her urge to eat with other relationships 
in her life. Over the course of the next week, she was allowed to go on several passes in order to gauge her 
progress and her ability to deal with her parents. All of these ended early, following oppositional and 
challenging behavior. This behavior was echoed on the unit as indicated in the physician's note of April 9. 
Over the course of the next week, she began to show some compliance with her dietary regimen. She was 
beginning to recognize that bad feelings should not necessarily be labeled as hunger. She was allowed to go 
on additional passes with her mother in order to bring to a head the femily issues which these engendered. 
This allowed for these issues to be brought out and addressed directly during therapeutic sessions in the 



9:12 NORTH CAROLINA REGISTER September 15, 1994 949 



CONTESTED CASE DECISIONS 



hospital. See physician's notes, April 15. At about this time, her behavior on passes began to improve and 
the focus of her treatment began to switch to preparing her for the transition out of the hospital. This phase 
of treatment focuses on consolidating the gains made and preparing the child to continue to exercise 
appropriate self control outside the hospital setting and to continue a treatment course in an outpatient setting. 
By May 10, 1993, the date of discharge, she had met the discharge criteria which had been established for 
her near the time of her admission and which are described in more detail above. 

27. Dr. Geyer also testified, and it is found as feet, that there was a substantial likelihood of 
improvement. The treating team believed that the patient could be engaged in therapy and that she could 
begin to address the underlying problems behind her violent and aggressive behavior and her compulsive 
overeating. 

28. Dr. Geyer testified that the services rendered were required for the medically necessary 
treatment of the patient's mental disorder. 

29. As described by Dr. Geyer, this patient's admission to the hospital, her treatment during her 
stay, and the discharge criteria which were established for her were all consistent with appropriate community 
practice standards. These practice standards are also consistent with those established by the American 
Association of Child and Adolescent Psychiatry. Both the admitting criteria and the discharge criteria were 
well-defined and within appropriate standards of practice. 

30. It is found, based upon all of the testimony, that Carolinas Medical Center was the only 
fecility in the community which could offer R.B. the appropriate diagnostic and therajjeutic services in a 
confined setting adequate to contain both her behavioral outbursts and her propensity to run away. 

31. Mr. Harold Wright, Deputy Administrator of the Plan, testified that the criteria applied for 
this patient's review were developed by the Mental Health Manager, not the State agency. He further testified 
that these criteria were not publicized to Plan beneficiaries and they were not adopted as a party of any agency 
rulemaking, nor were they included in the benefits booklet distributed to State employees and Plan 
beneficiaries. 

32. Dr. Michael Lancaster, Medical Director of Value Behavior Health, the managed care 
subcontractor for the State Plan, testified that he reviewed this case using criteria which were not the same 
as the criteria listed in the State Plan benefits booklet nor the "medical policy" contained in the Respondent's 
Exhibit 3. 

33. N.C. Gen. Stat. § 135-40(b) allows the State to contract with a "Claims Processor" to "administer 
the Plan benefits." The statute authorizes the Claims Processor to "determine benefits and other questions 
arising thereunder." 

34. N.C. Gen. Stat. § 135-40. 7B(d) provides as follows: 

Benefits provided under this section shall be subject to a managed, individualized care 
component consisting of (i) inpatient utilization review through preadmission and length-of- 
stay certification for scheduled inpatient admissions and length-of-stay certification for 
unscheduled inpatient admissions .... 

35. The rulemaking procedures of the Administrative Procedures Act ("APA") apply 
to all state agencies which are not specifically exempt therefrom. N.C. Gen. Stat. § 150B-l(c). 



950 9:12 NORTH CAROLINA REGISTER September 15, 1994 



CONTESTED CASE DECISIONS 



36. N.C. Gen. Stat. 150B-2(8a) provides, in pertinent part, that: 

(8a) "Rule means any agency regulation, standard, or statement of general applicability that 
implements or interprets an enactment of the General Assembly or Congress or a regulation adopted 
by a federal agency or that describes the procedure or practice requirements of an agency. The term 
includes the establishment of a fee and the amendment or repeal of a prior rule. 

37. In a 1986 Attorney General's opinion it was determined that: 

When 150B-2(8a) and 1 SOB- 11(1) are read together, it is apparent that any procedures, 
whether formal or informal, that directly or substantially affect the rights or procedures of non-agency 
persons must be adopted as rules . See Opinion of Attorney General to Elizabeth H. Drury, Director, 
Office of Legislative and Legal Affairs, Department of Human Resources, 56 NCAG 25 (1986). 
(Emphasis added) 

38. N.C. Gen. Stat. 150B-11(1) (repealed in 1991) was part of Article 2 of the APA, all of which 
was repealed in 1991 and replaced by Article 2A. To a great extent, Article 2A recodified the procedures 
for rulemaking which had previously been codified in Article 2. 

39. Article 2A also enumerated the long-standing tenet that a rule should not repeat the content 
of a law, rule, or federal regulation. N.C. Gen. Stat. 150B-19(4). 

40. In Administrative Law and Practice (Koch, Charles H., West Publishing Co. 1985), 
statements of policy, i.e. non-rules are discussed at Section 3.24. That provides, in pertinent part, that a 
statement of policy should (a) not purport to establish a "binding norm" and (b) must apply prosp>ectively. 

41 . The criteria under which the respondent has purported to review this patient's admission and 
continued stay for psychiatric treatment has never been proposed or promulgated as a rule and is not currently 
a part of the North Carolina Administrative Code. 

42. The Executive Administrator and Board of Trustees of the Plan have issued no rules or 
regulations to implement the Plan. 

Based on the foregoing Findings of Fact, the undersigned makes the following: 

CONCLUSIONS OF LAW 

1. N.C. Gen. Stat. § 135-39.8 gives the Executive Administrator and Board of Trustees of the 
State Plan the authority to issue rules and regulations to implement the Plan. 

2. The Plan is not exempt from the APA, either under the terms of the APA itself, N.C. Gen. 
Stat. § 150B-l(d), or by virtue of the statutes establishing the Plan, N.C. Gen. Stat. § 135-1 et seq. Vass v. 
NC Teachers' and State Employees' Comprehensive Major Medical Plan , 324 N.C. 402, 379 S.E.2d 26 
(1989). 

3 . The undersigned concludes as a matter of law that the Plan criteria clearly applied in this case 
to the continuing stay review fall under the definition of "rule" in the Administrative Procedure Act, N.C. 
Gen. Stat. 150B and that they have not been promulgated as rules. 

4. As a non-rule or a statement of policy, the criteria have no binding effect on the Petitioner. 

5. N.C. Gen. Stat. § 135-40(b) allows the Plan to enter into contracts with third parties as claims 
processors to administer the Plan and determine benefits and other questions arising under the Plan. These 
statutory provisions do not allow the state to abdicate its responsibility to develop the Plan itself. 



9:12 NORTH CAROLINA REGISTER September 15, 1994 951 



CONTESTED CASE DECISIONS 



6. While § 135-40(b) allows the State to subcontract out the administration of the Plan, it does 
not authorize the State to allow third parties to develop the Plan criteria. This is the responsibility of the 
State, and it cannot subcontract out this responsibility. 

7. The criteria applied by the Plan in this case are invalid as having been developed by a third 
party contractor and not by the Plan, nor have the criteria been adopted as rules under state law. 

8. Neither § 1 35-40. 7B(d) nor § 135-40(b) authorize the state to implement review criteria 
developed by a third party and not adopted as rules when those criteria are inconsistent with existing standards 
of care. 

9. N.C. Gen. Stat. § 135-40.7(5) allows coverage for services: 

which are certified by a physician who is attending the individual as being required for the 
medically necessary treatment of the injury or disease. 

10. The medical care provided to the patient was medically necessary and appropriate care for 
her psychiatric illness. 

1 1 . The care provided to the patient during her admission to CMC met appropriate community 
standards of care in the practice of psychiatric medicine. 

12. It is concluded that the patient met all valid criteria for coverage under the state Plan during 
her admission to CMC. 

Based on the above Conclusion of Law, the undersigned makes the following: 

RECOMME^a)ATIQN 

That the Respondent certify the admission of R.B. to the Carolinas Medical Center - Center for 
Mental Health for the balance of her stay from February 28, 1993 through May 10, 1993. 

ORDER 

It is hereby ordered that the agency serve a copy of the final decision on the Office of Administrative 
Hearings, P.O. Drawer 27447, Raleigh, N.C. 27611-7447, in accordance with North Carolina General Statute 
150B-36(b). 

NOTICE 

The agency making the final decision in this contested case is required to give each party an 
opportunity to file exceptions to this recommended decision and to present written arguments to those in the 
agency who will make the final decision. G.S. 150B-36(a). 

The agency is required by G.S. 150B-36(b) to serve a copy of the final decision on all parties and to 
furnish a copy to the parties' attorney of record and to the Office of Administrative Hearings . 

The agency that will make the final decision in this contested case is the North Carolina Teachers' 
and State Employees' Comprehensive Major Medical Plan. 

This the 23rd day of August, 1994. 



Beecher R. Gray 
Administrative Law Judge 



952 9:12 NORTH CAROLINA REGISTER September 15, 1994 



NORTH CAROLINA ADMINISTRATIVE CODE CLASSIFICATION SYSTEM 



1 he North Carolina Administrative Code (NCAC) has four major subdivisions of rules. Two of these, 
titles and chapters, are mandatory. The major subdivision of the NCAC is the title. Each major 
department in the North Carolina executive branch of government has been assigned a title number. 
Titles are further broken down into chapters which shall be numerical in order. The other two, 
subchapters and sections are optional subdivisions to be used by agencies when appropriate. 



TITLE/MAJOR DIVISIONS OF THE NORTH CAROLINA ADMINISTRATIVE CODE 
TITLE DEPARTMENT LICENSING BOARDS CHAPTER 



1 


Administration 


Acupuncture 


1 


2 


Agriculture 


Architecture 


2 


3 


Auditor 


Auctioneets 


4 


4 


Commerce 


Barber Examiners 


6 


5 


Correction 


Certified Public Accountant Examinere 


8 


6 


Council of State 


Chiropractic Examinere 


10 


7 


Cultural Resources 


General Contractors 


12 


8 


Elections 


Cosmetic Art Examiners 


14 


9 


Governor 


Dental Examiners 


16 


10 


Human Resources 


Dietetic s/Nutrition 


17 


11 


Insurance 


Electrical Contractors 


18 


12 


Justice 


Electrolysis 


19 


13 


Labor 


Foresters 


20 


14A 


Crime Control & Public Safety 


Geologists 


21 


15A 


Environment, Health, and Natural 


Hearing Aid Dealers and Fitters 


22 




Resources 


1 landscape Architects 


26 


16 


Public Education 


I ^ndscape Contractors 


28 


17 


Revenue 


Marital and Family Therapy 


31 


18 


Secretary of State 


Medical Examiners 


32 


19A 


Transportation 


Midwifery Joint Committee 


33 


20 


Treasurer 


Mortuary Science 


34 


*21 


Occupational Licensing Boards 


Nursing 


36 


22 


Administrative Procedures 


Nursing Home Administrators 


37 


23 


Community Colleges 


Occupational Therapists 


38 


24 


Independent Agencies 


Opticians 


40 


25 


State Personnel 


Optometry 


42 


26 


Administrative Hearings 


Osteopathic Examination & Reg. (Repealed) 


44 






Pharmacy 


46 






Physical Therapy Examineis 


48 






Plumbing, Heating & Fire Sprinkler Contractors 


50 






Podiatry Examineis 


52 






Professional Counselors 


53 






Practicing Psychologists 


54 






Piofessional Engineers & T ^nd Surveyors 


56 






Real Estate Appraisal Board 


57 






Real Estate Commission 


58 






Refrigeration Examiners 


60 






Sanitarian Examiners 


62 






Social Work Certification 


63 






Speech & Language Pathologists & Audiologists 


64 






Therapeutic Recreation Certification 


65 






Veterinary Medical Board 


66 



Note: Title 21 contains the chapters of the various occupational licensing boards. 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



953 



CUMULATIVE INDEX 



Pages 



CUMULATIVE INDEX 

(April 1994 - March 1995) 



Issue 



1 - 75 1 - April 

76 - 122 2 - April 

123 - 226 3 - May 

227 - 305 4 - May 

306 - 348 5 - June 

349 - 411 6 - June 

412 - 503 7 - July 

504 - 587 8 - July 

588 - 666 9 - August 

667 - 779 10 - August 

780 - 876 11 - September 

877 - 956 12 - September 



Unless otherwise identified, page references in this Index are to proposed rules. 



ADMINISTRATION 

State Employees Combined Campaign, 878 

AGRICULTURE 

Plant Industry, 127 

COMMERCE 

Alcoholic Beverage Control Commission, 423 
Banking Commission, 884 
Energy Division, 4 

CRIME CONTROL AND PUBLIC SAFETY 

State Highway Patrol, Division of, 243 

ENVIRONMENT, HEALTH, AND NATURAL RESOURCES 

Coastal Management, 443, 825 

DEM/ Air Quality, 80, 805 

Departmental Rules, 254 

Environmental Management, 81, 258, 352, 616 

Health Services, 323, 370, 445, 834, 913 

Marine Fisheries Commission, 820 

Mining Commission, 442 

NPDES Permit, 3, 232 

Radiation Protection Commission, 678 

Solid Waste Management, 171, 364 

Water Resources, 165, 255 

Wildlife Resources Commission, 38, 42, 84, 358, 830, 910 

Wildlife Resources Commission Proclamation, 125 

FINAL DECISION LETTERS 

Voting Rights Act, 2, 312, 506, 594 



954 



9:12 



NORTH CAROLINA REGISTER 



September 15, 1994 



CUMULATIVE INDEX 



GENERAL STATUTES 

Chapter 150B, 780 

GOVERNOR/LT. GOVERNOR 

Executive Orders, 1, 123, 227, 306, 349, 412, 504, 588, 667, 877 

HUMAN RESOURCES 

Child Day Care Commission, 10 

Children's Services, 136 

Day Care Rules, 148 

Departmental Rules, 668 

Facility Services, 4, 128, 423, 509, 668, 890 

Medical Assistance, 318, 440, 513, 597 

Mental Health, Developmental Disabilities and Substance Abuse Services, 13, 24, 36, 313, 430 

Social Services, 136, 595, 802 

Vocational Rehabilitation Services, 434 

INDEPENDENT AGENCIES 

State Health Plan Purchasing Alliance Board, 99 

INSURANCE 

Departmental Rules, 891 
Financial Evaluation Division, 892 
Life and Health Division, 525, 905 
Medical Database Commission, 605 
Multiple Employer Welfare Arrangements, 76 
Property and Casualty Division, 892 
Special Services Division, 76 

JUSTICE 

Alarm Systems Licensing Board, 351, 614, 804 

Criminal Justice Education and Training Standards Commission, 149 

Private Protective Services, 802 

Sheriffs' Education & Training Standards Commission, 670 

State Bureau of Investigation, 234, 530 

LABOR 

Mine and Quarry Division, 239 
OSHA, 77, 160, 675, 906 
Variance, 230 

LICENSING BOARDS 

Acupuncture Licensing Board, 44 

Auctioneers Licensing Board, 836 

Barber Examiners, 563 

Chiropractic Examiners, 376 

Cosmetic Art Examiners, 280 

Landscape Architects, Board of, 95 

Medical Examiners, 192, 565 

Mortuary Science, 720 

Nursing, Board of, 45, 724 

Opticians, Board of, 845 

Optometry, Board of Examiners, 194 

Physical Therapy Examiners, 566 

Plumbing, Heating and Fire Sprinkler Contractors, Board of, 96, 725 



9:12 NORTH CAROLINA REGISTER September 15, 1994 955 



CUMULATIVE INDEX 



Practicing Psychologists, Board of, 97 
Professional Counselors, Board of Licensed, 50 
Professional Engineers and Land Surveyors, 728, 924 
Sanitarian Examiners, 730 

LIST OF RULES CODIFIED 

List of Rules Codified, 53, 196, 281, 378, 635, 742, 926 

PUBLIC EDUCATION 

Elementary and Secondary Education, 375, 540, 920 

SECRETARY OF STATE 

Land Records Management Division, 712 
Securities Division, 476, 616, 709 

STATE PERSONNEL 

Office of State Personnel, 477, 847 

TAX REVIEW BOARD 

Orders of Tax Review, 415 

TRANSPORTATION 

Highways, Division of, 85, 718, 923 
Motor Vehicles, Division of, 89, 276, 542 



956 9:12 NORTH CAROLINA REGISTER September 15, 1994 



NORTH CAROLINA ADMINISTRATIVE CODE 



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